Retired New York City government workers — who enjoy among the most generous taxpayer-provided health benefits in the U.S. — are suing Mayor Eric Adams and the city for $55 million over $15 copays for doctors visits.
The Manhattan Supreme Court class-action suit was filed on behalf of 183,0000 retirees.
It claims the city and Emblem Health/GHI are violating a court order to not impose additional costs on retirees for the 20 percent supplemental coverage not covered by Medicare, the federal health program for senior citizens 65 and over.
The copays — which are far less than the standard $40-$50 fee required by private insurance — were imposed in January. Retirees previously were not charged a copay.
Separately, Adams has thrown down the gauntlet. He said the City Council must agree to allow his administration to switch retired city workers to a private Medicare Advantage plan — with an option to opt out in exchange for a high out of pocket price — or he will unilaterally move all retirees into a Medicare Advantage plan.
Retirees have argued that Medicare Advantage denies or provides less medical care than their current supplemental “Senior Care” plan.
“Copays are simply the city and Emblem’s poorly disguised way to pass along their costs,” charged Marianne Pizzitola, president of the NYC Organization of Public Service Retirees, one of the plaintiffs.
“It violates the contract, the law, and the judge’s order and is outrageous. These co- pays are having a horrible impact on seniors who typically have to see several doctors every month.”
The plaintiffs are seeking $55 million in damages in the lawsuit, filed by Steve Cohen of Pollock Cohen.
But one health care expert said it’s time for NYC retirees to help the city rein in medical costs.
“New York City taxpayers are paying for the most expensive version of retiree health care to its city public employees of anywhere in the country — in the public sector, let alone the private sector,” said Peter Warren, research director for Empire Center for Public Policy.
“New York City taxpayers are paying for a level of health care for government retirees they don’t get.”
In the private sector, most employers do not offer retired workers health care. Private sector retirees have to rely on Medicare and personally cover additional benefits, Warren noted.
He said the city has a staggering $126 billion in retiree health care liability.
The lawsuit claims the $15 copays cause “irreparable harm” to retirees.
Medicare picks up 80 percent of the costs for hospital and doctor visits. Under an agreement with the unions, the city picks up the remaining 20 percent under the supplemental “Senior Care” supplemental plan.
“Imposing a $15 copay illegally transfers a portion of the 20% provider cost from the
Defendants to Retirees. This seemingly minor fee is extremely onerous for elderly
individuals living on small, fixed pensions who require frequent medical attention – and it is not permitted under the Contract,” Cohen said.
The suit acknowledges the city spends “a great deal of money” — $9.5 billion on health insurance for active employees, retirees and dependents in Fiscal Year 2021. About one-third of the cost — $3.2 billion — covered retirees.
“Not surprisingly, the City has been looking for ways to save money on health
insurance for many years,” the suit says.
The suit accuses the city of breach of contract, unjust enrichment, fraudulent inducement and false advertising.
City Law Department spokesman Nick Paolucci said of the co-pay lawsuit, “We’ll review the case. We have no other comment at this time.”
Emblem Health had no immediate comment.
The prior administration under Mayor Bill de Blasio reached a deal with the unions that required retired firefighters, police officers, teachers and other civil servants to enroll in the privately-run Medicare Advantage Plus plan to save the city $600 million a year.
Retirees would have to contribute $191 a month if they’d rather keep their current city-funded SeniorCare Plus Plan instead of enrolling in Medicare Advantage, but the courts have thus far blocked the change based on a prior lawsuit filed by retirees to prevent the switchover.
The city is still appealing that ruling.