Empire backs out of city’s plan to privatize health insurance for retirees

The city Office of Labor Relations and the Municipal Labor Committee, which represents retired city employees, originally agreed to pursue switching to Medicare Advantage plans in 2018.

Now that Empire has backed out of the plan, there is no Advantage Plus plan to switch retirees to. Harry Nespoli, chair of the Municipal Labor Committee, said Empire’s decision is “an additional problem” in “trying to give retirees adequate health care.” He called Medicare Advantage plans a “reasonable option” for retirees.

In a memo shared by the NYC Organization of Public Service Retirees, a group of about 2,000 retirees that formed in opposition to the city’s proposed plan, Empire said it couldn’t participate in the plan to offer Advantage plans because the city did not provide it with exact plan benefit details by the date requested.

“This timeline was important because delaying any further would not give retirees enough time to fully understand their options, benefits and coverage in advance of open enrollment prior to Jan. 1, 2023,” Empire’s statement, released Tuesday, reads.

Before the news about Empire, the city’s plan was met with legal challenges from other insurance providers and retirees. The retirees argued that they should be entitled to the original benefits they were offered when they retired and that Medicare supplemental plans provide much better coverage than Advantage plans.

Steve Cohen of Pollock Cohen, who represents the NYC Organization of Public Service Retirees in a lawsuit against the city filed in the summer of 2021, said retirees are most concerned about Advantage plans because many doctors refused to participate in them because of prior authorization requirements.

Originally, the city told retirees who didn’t want to join Medicare Advantage that they could keep supplemental plans, but they would have to pick up the premium cost themselves, which retirees objected to and Cohen argued that a provision in the city’s own booklet prohibits.

Now that Empire has pulled out, the city and the Municipal Labor Committee are working together to determine how to offer alternative Advantage plans to retirees, Nespoli said.

“New York City was notified that Anthem/ Empire Blue Cross Blue Shield has withdrawn its participation in the NYC Medicare Advantage Plus Plan. The City and the Municipal Labor Committee continue to believe that a customized Medicare Advantage Plan provides the retirees, the City and its taxpayers with the best opportunity for high quality healthcare. We remain committed to moving forward with the program and are exploring alternative options,” Jonah Allon, a City Hall spokesperson, told Crain‘s.

In the retirees’ lawsuit against the city, the court last ruled in March that retirees could choose to stay on their current supplemental plans for free, and the city appealed that ruling. Cohen said next steps in the appeal process would be delayed as the city figured out the next steps.

Marianne Pizzitola, the president of the retiree organization, said the group will move forward as planned.

“We believe that even though BCBS pulled out of the Alliance, there will still be someone else ready to take their place,” she said. “It’s lucrative. So our plan isn’t changing.”