NYC's Medicare Advantage Switch on Hold

[music]

Brian Lehrer: Brian Lehrer on WNYC. New York City government retirees, 250,000 of them about had been bracing for, if not dreading, a major change in healthcare coverage from traditional Medicare with supplemental coverage paid for by the city to a privatized Medicare advantage plan run by Aetna. Today was supposed to be the deadline for opting out and buying any additional Medicare coverage as an individual on the open market. Well, for now, that's all on hold.

A group of municipal retirees filed a lawsuit against the number of city agencies and other parties in an effort to scrap the plan altogether. On Friday afternoon, a judge granted the plaintiff's petition to at least temporarily block the move while the case is pending in court. That came, as I say, just days before the crucial opt-out deadline, which would've been today and would've required those remaining on traditional Medicare to waive important city benefits as well as pay for healthcare coverage themselves.

City officials had said the shift to private Medicare advantage would save as much as $600 million that the city could use for other things. In this lawsuit, and as you may have heard on this show, municipal retirees have argued that moving onto a Medicare Advantage plan would mean worse coverage. More now on this lawsuit and temporary pause in the transition to Medicare Advantage with Caroline Lewis, our health and science reporter for WNYC and Gothamist. Hi, Caroline, welcome back. Always great to have you on the show.

Caroline Lewis: Hi, Brian. Good to be on. Should be an interesting discussion.

Brian Lehrer: I think so. With the listeners, yes, we're going to take your calls on this ongoing saga. Once again, 212-433-WNYC, 212-433-9692 with questions and comments. You can also text to that number, 212-433-WNYC. Caroline, remind everybody who's not following this closely who are the plaintiffs in this suit beyond what I said in the intro, and who exactly does it name as defendants?

Caroline Lewis: The suit involves a group of city retirees, and they're seeking to make it a class action suit. Then it's against the City of New York, Eric Adams, the Office of Labor Relations, and the commissioner of the Office of Labor Relations, and the City Department of Education. It lists a number of defendants in the case.

Brian Lehrer: Retirees might not like the switch as policy, but what was the legal basis of the lawsuit to get the courts, the judicial branch, to put it on hold?

Caroline Lewis: Under the new plan, the city would continue to pay for retiree health benefits by covering their monthly premiums under the new plan and proponents of the plan, including some powerful public sector union, say, coverage would be equal to or better than what retirees already have. They would even get some extra benefits. Retirees and some health policy experts argue that Medicare Advantage plans actually provide worse coverage overall, and that's something we can get into more.

Part of what they're arguing in court is that the switch is actually violating a state law that prevents public employers from diminishing health insurance benefits for retirees without also diminishing benefits of active employees. That raises an interesting point of tension, which is that the $600 million the city says it will save by switching retirees to a Medicare Advantage plan is supposed to go into a fund that could help pay for health coverage for current public union members. Then there's also a question about whether the city is violating a local law that says they have to pay for the full cost of supplemental Medicare coverage.

Brian Lehrer: Part of the lawsuit, based on what you just said, is that the city and the unions are illegally transferring wealth from retirees to current workers by using the $600 million that would be saved to beef up or sustain coverage for the current workers.

Caroline Lewis: Well, that is something that retirees are concerned about, and that's sort of tangential. I would say the main point is that they feel that the new plan will be worse. There's this question, are they actively diminishing coverage by switching people onto this new plan? That does raise questions about the actual merits of the plan, which will be argued in the lawsuit.

Brian Lehrer: Well, let's talk about that. Because the Medicare Advantage plan, as you said, would include some benefits that regular Medicare doesn't. One that I happen to read that I don't see mentioned very much is non-emergency medical transportation, which infirm seniors sometimes need, and call an ambulance if you have an emergency. If you have no other way to get to more routine doctor's appointments, it would cover that. You tell me what else is in there as expanded benefits, and then why they say that even with those, they consider this coverage worse.

Caroline Lewis: The new plan does have some extra perks. It has coverage for hearing aids, which can be expensive, and then things like fitness classes, and preventive care like that. Also, there's a lower deductible. Aetna has tried to sweeten the deal by waiving some of the out-of-pocket costs for seniors under the first year of the plan. Part of how Medicare Advantage plans keep their costs down, in general, is by requiring prior approval for more expensive services.

That means you're supposed to be inpatient in the hospital, and suddenly, your health plan is scrutinizing whether you really need that care or certain specialty drugs and things like that. Even if the care doctor's recommending ultimately gets approved, it can mean more patient works for patients and their doctors, it could mean a delay in care. In the case of Aetna, they've agreed to whittle down the number of services that require prior approval under the plan for city retirees.

They're going to have to report on exactly how they're using that. They can also review that list of services after two years. Some people are worried that it's only going to look good on paper in the first couple of years, and then get worse over time. Then the other major concern is that not all doctors will accept the new plan. I've certainly talked to some doctors who say that they don't like Medicare Advantage plans. They call it Medicare disadvantage because it comes with more paperwork.

According to Aetna and city officials, most of the doctors who take the current Medigap plan the city offers called senior care will also take this new plan. Aetna will pay for services with doctors who are out of network as well. All the major hospitals are supposed to be in the new plan that are in the New York City area.

Brian Lehrer: That's interesting about waiving some of the fees for the first year or waiving some of the scrutiny for the first two years. That reminds me of, like, you sign up for an expanded cable TV package, and you get HBO for free for one year, and then suddenly it goes away, and you're like, "What?" You have to pay for it. On the last thing you said about doctors out of plan, this is also such a huge part of it, I'm sure, can patients expect fewer of their current doctors or New York area hospitals when needed to be in plan under Medicare Advantage or let's say covered under Medicare Advantage, whether they're in plan or not? Are all the major locals in the Aetna plan, the New York Presbyterian, Cornell Weill, Northwell Health, and Mount Sinai Groups, for example, or Montefiore?

Caroline Lewis: Yes, so the major hospitals are covered under the plan and in network. I think initially there was some concern that specialty hospitals like Memorial Sloan Kettering and the hospital for special surgery wouldn't participate, but they are currently listed as in network under Aetna's materials on the plan. Some seniors have been talking to their doctors and say that their regular doctor or their regular specialist says that they are not going to participate.

Then I think it's up to the doctor whether to keep seeing the patient, and then Aetna says they will pay for out-of-network care, but I think it just creates anxiety for some seniors about whether they're going to have to switch doctors under this new plan.

Brian Lehrer: For a senior who's considering if this deadline gets reimposed whether to opt out of Medicare Advantage and go on to the market as an individual to cover the gaps in Medicare, they're going to have to look at the in-plan Aetna list to see if their doctors are covered, I guess, to be really assured of that. Other than that, you're saying it's a matter of trust that the out-of-plan coverage would remain permanently?

Caroline Lewis: Yes, it's basically a matter of trust that even if a doctor is out of network, Aetna will reimburse you for care with that doctor. Obviously, there's a lot more at stake if someone opts out than just whether their doctor is covered. They're considering that, but also the fact that they could lose pretty generous city health benefits.

Brian Lehrer: Like what?

Caroline Lewis: Basically, there is another option. Under city health benefits, there is another option besides the current Medigap plan called Senior Care which is traditional coverage with some supplemental plan paid for by the city, but it's optional. If someone decides that they really want to stay on traditional Medicare with some form of supplemental coverage, they would not be able to do that once the city makes this switch because Senior Care, the supplemental plan the city offers, will no longer be available.

If someone wants to opt out, and they really want to stay on traditional Medicare, they would end up having to pay all the out-of-pocket costs themselves and buy a Medigap plan themselves. For some people, that's cost prohibitive, and for other people it's just, "I put in the work working for the city partly so I could get these benefits, and I'm not going to give it up even if I'm a little concerned about the quality of the new care or whether my doctor will accept it," and that sort of thing.

Brian Lehrer: Interesting. Now, when they say that they will cover out-of-plan doctors as well as in-plan doctors, does that mean at the same rate of reimbursement or small dollar copays because I know for a lot of people who have whatever private health insurance who are not retirees, just regular people who have coverage from their employer, let's say, or on an Obamacare policy, whatever, in-plan doctors are cheaper to go to than out-of-plan doctors, even if they're out of plan benefits. Would it be the same cost to go to out-of-plan doctors under what the city is offering here?

Caroline Lewis: That is what Aetna is saying that they're going to reimburse the same amount for out-of-network doctors. It's ultimately up to a doctor whether they want to work with Medicare Advantage or not.

Brian Lehrer: Karen in Nassau County, a doctor, you're on WNYC. Thank you for calling in.

Karen: Good morning. Thank you for taking my call. I'm a physician. I run a physician's office, actually. I've been dealing for 30 years, so I've seen the changes. There's Medicare Advantage plans which have been sold to the elderly, or the elderly, the older person who's been working all their lives. It is a disadvantage. I'm sorry too. I'm so happy that they're taking a lawsuit against us because I do this actively every single day, it delays care. I work very hard to get their authorizations quickly.

This is for anything from any kind of stress tests or any kind of MRIs, things that are needed that the doctor is testing for, there is a delay in care. You must get the authorization. Big disadvantage for them. The other thing that's very, very difficult, if a patient needs to go to rehabilitation after a surgery, after an injury, the rehabilitation system in a rehab center, they absolutely deny everything coming from Aetna.

Aetna is one of the better ones, but it still creates a tremendous amount of anxiety, problems, and ultimately delayed care and poor outcomes. It's being studied now, so this has all come out. With the lawsuit, they'll probably come out with all the studies showing the delayed care and the poor outcomes for people, plus the other idea that it's being sold to them. In other words, they say, "Oh, you only have to have a copay. There's no deductible." Patients then will not come into the office for a follow-up because of the copay.

That also creates a problem with good follow-up prevention, et cetera. Again, will ultimately cost more for the patient, for the system in general. The third thing I was going to say is that when people in Medicare, regular Medicare, they can go all over the country and get care. Aetna may be limited in terms of the states. Again, that's a big disadvantage for a patient who may want to go visit family, move to Florida, et cetera. Those are the major things I wanted to just point out.

Brian Lehrer: Let me follow up on one, and then I'll ask Caroline about that national aspect that you just brought up. I know it's one of the things that the unions are saying is good for the patients because Aetna has a big network around the country for people who don't want to live in New York anymore or wherever locally they've been getting their healthcare. On what you brought up about the rehab centers, because people as they get older are very frequently going to need some kind of hospital stay followed by some kind of rehab stay, what are you saying is worse in that regard than under traditional Medicare?

Karen: The idea of how you have to get authorizations to go to rehab is a complicated step to begin with, with these Medicare Advantage plans and even Aetna, who really touts themselves as the better one, there's denial. They'll go for a patient, they may be in for five days, they have to re-up it. If they can focus on that and say, "Okay, we will have that not having to be prior authorized or not having such a hard stringent criteria for patients to stay," that's going to be important for these patients going forward.

Many of the people who are selling these also are not sick. They say, "Oh, well, you haven't been sick, you're not on a lot of medications, you don't need regular Medicare. This will be fine. This will save you money." The minute they have four problems, again it becomes a big problem.

Brian Lehrer: Is it harder for doctors who want to see patients on an ongoing basis, let's say for ongoing conditions, to just say, "Come back in three weeks, we'll take another look at it then," because that would need prior authorization in a different way than they need now?

Karen: No, it does not need any prior authorization, but the patient will have to pay another copay. In other words, they're copays, they're saying they're going to waive. You pointed that out. Yes, they waive it, just like the cable. They'll waive something for a year, and then they're going to hit with different copays. We have patients who don't want to come in because of the copay, and apparently, it's not a legal thing. We'll say, "Don't worry about the copays." We literally say that to patients. "Don't worry about the copays. Please come in three weeks." It's more important they get checked than worry about the copay.

Brian Lehrer: Karen, thank you so much for your-

Karen: You're welcome.

Brian Lehrer: -physician's input on all of this. Caroline, any reaction to any of that, but particularly on the geographical reach of the Aetna Medicare Advantage plan? You might have heard Michael Mulgrew, the teacher's union president, on this show just recently say that's one of the good things about this because a lot of people when they retire don't stay in New York. I think he might have even mentioned Florida in particular as an example because it's such a commonplace that people go. He was touting the national reach of the Aetna plan. Have you done reporting on that?

Caroline Lewis: I know that they say they offer national coverage, and I haven't looked into this too much, but I have a sense that their network is obviously going to be much more robust locally. I feel like there might be, in saying they offer national coverage, some reliance on that idea that they will pay for out-of-network care. Again, it's then up to the doctor whether they accept it, and there might be some uncertainty on the part of the patient of who they can see. I think that's also a point of concern for people.

Brian Lehrer: I think we have a satisfied customer with Medicare Advantage calling in. Roseanne in-

Roseanne: It isn't.

Brian Lehrer: -Fairfield, New Jersey. Hi, Roseanne. No, but it isn't? Hi.

Roseanne: Hi. Yes, it is. Hi, this is Roseanne. I'm a retired teacher now, 11 years, from New Jersey from Essex County. We do have the Aetna plan. It might be different from New York. We were all very skeptical. I've checked with my friends, and I've been very pleased. Now maybe ours is different. I don't know. It's the educator's Medicare plan, and I've never been denied. I've had unfortunately few procedures, everything's okay.

I've never had a problem. I do have a few doctors. No one has ever denied it. I don't know if it's exactly the same, but if it's this one, I think they'll be okay. As I said, we were very skeptical, many of us, but we went to meetings and so forth, and so far, and it's been quite a few years now, and it seems to be working out for us. [unintelligible 00:18:51]

Brian Lehrer: Do you know people who've had the kinds of problems that the doctor who called in just before was talking about, more serious health conditions that might require more delays as they seek pre-authorization or more difficulty getting rehab cover, things like that?

Roseanne: No, we don't need pre-authorization. We don't need pre-authorization. That's what I'm saying. Maybe ours is different because we don't need that. I've not needed it.

Brian Lehrer: Interesting.

Roseanne: Anyone I know, I do have colleagues, unfortunately, have had more serious issues than I, and I've never heard them say they needed pre-authorization for anything.

Brian Lehrer: Roseanne, thank you very much. Maybe we should clarify the difference, Caroline, between pre-authorization and authorization by a primary care physician. This would be a PPL plan. In other words, you don't have to go through a primary care physician to get referred to a specialist. You can just go see a specialist. Pre-authorization technically refers to something different, right?

Caroline Lewis: Yes. Pre-authorization is just the idea that the health plan has to review whether they will cover a certain type of care that the doctor is recommending. For doctors, sometimes they have to keep track of which types of care requires that authorization from which plan, and then figure it out, and then call the plan, and then find out if they need it. It can create some delays. As people have said, Aetna is one of the better ones in some senses and worse than others.

There has been some sort of research on how different companies use prior authorization under Medicare Advantage. There was some research showing that in 2021 Aetna was one of the companies that had a lower rate of requiring prior authorization for services, but it had among the higher denial rates when it did require prior authorization, and then in most cases if someone appealed that denial, it was overturned. Again, it's like this worry that if it's required at all, it will create these delays in care for patients.

Brian Lehrer: We mentioned earlier that the opt-out period was supposed to end today. Today was supposed to be the deadline for opting out of the Medicare Advantage plan for New York City retirees, municipal retirees, but that's now suspended and extended by the court. We don't know when or if that new deadline will be imposed, but you reported a fascinating stat that out of the 200,000 plus retirees who would be affected by this, only 1,600 had opted out as of last week. If Medicare Advantage is so bad, why wasn't there a much bigger wave?

Caroline Lewis: Well, I mean, I think the biggest reason is that people don't want to lose their city health benefits. Some people can't afford to pay more for coverage since they would be losing the city paying the premiums and that sort of thing for their care. Then other people messaged me to say that they were told not to. They were advised by the group of retirees leading this fight not to opt out until the last minute because there might be some movement with the lawsuit, and that was correct. Some people were saying like, "I want to opt out, but I'm waiting because I want to see what happens here."

Brian Lehrer: A listener responding to the previous caller from New Jersey writes, "I'm also a New Jersey retired teacher. I live in Brooklyn now. Aetna must indeed pre-authorize. I've had several 'serious illnesses' and have had to wait for authorization." That conversation's still taking place. Let's get one more caller in here. How about a former hospital administrator? Bruce in Westchester, you're on WNYC. Hi, Bruce.

Bruce: Hi, Brian. Thank you so much for the public service you provide. I am, as you mentioned, a retired hospital administrator. I actually work currently for Westchester County, and I'm about to retire myself. Just as New York City employees, we have a very nice Medicare supplemental plan. The point I wanted to make is there is no company that gets into the Medicare expecting to lose money. They're all in it to make money. They offer trinkets like hearing aids or eyeglasses and that kind of thing, which cost them a few hundred dollars, and they make it back on services like chemotherapy.

Minimum cost for a round of chemotherapy is in the neighborhood of $250 million. You may be happy today, you may be happy for the next three years with what a great plan the Medicare Advantage is, until you get really sick, and then you find out that's where they're going to start holding back, and you're going to wind up paying a price.

Brian Lehrer: What are you saying? You're not suggesting, or are you, that they would withhold chemotherapy from a cancer patient?

Bruce: Potentially.

Brian Lehrer: You've seen it as a hospital administrator?

Bruce: Yes, I've seen that kind of thing. Now, not Aetna. Aetna may be in a different class, but I've seen managed care companies, I mean, it's particularly true in the mental health arena, which most people aren't concerned about until, all of a sudden, they get slammed in the face with it. There are any number of arenas where some complex surgery, they'll declare that it's experimental or some new breaking cancer drug, and they'll say, "Oh, no, no. That's experimental." [crosstalk]

Brian Lehrer: In a way that regular Medicare would cover?

Bruce: Yes. If it's FDA-approved, Medicare has to cover it. If it's considered by the managed care company to be experimental or even outside their formulary, they won't cover it. They'll cover something different, but that may not be what your doctor requires.

Brian Lehrer: Even if it is FDA-approved, you're saying?

Bruce: Exactly.

Brian Lehrer: Bruce, thank you very much. Does that ring true, Caroline?

Caroline Lewis: I mean, yes. I think that it's interesting because there is this general concern about Medicare Advantage and these plans are facing more scrutiny, in general, and then Aetna and city officials are arguing that this plan will be better. It's hard to say yet whether it will actually be better, but speaking to doctors, yes, they express those concerns. They say they see inpatient rehab after a surgery denied and all these different things that they say are necessary they say they're seeing denied or just requiring some kind of approval that takes a lot of paperwork to get.

Brian Lehrer: By the way, what's the cost for those additional city health benefits you are referring to for people if this deadline is reimposed who do opt out of Medicare Advantage?

Caroline Lewis: For instance, paying for the premium for Medicare Part B on your own and not having it through the city starts at around $165 and goes up depending on your income and then--

Brian Lehrer: Per month?

Caroline Lewis: A month, yes. Then people might want to pay for a Medigap plan. I do wonder whether anyone has opted out and already paid for a Medigap plan and now is trying to claw it back now that the switch has been blocked. I'm not sure whether there's people in limbo right now.

Brian Lehrer: Interesting. Last question, national context. Unions across the country are increasingly adopting Medicare Advantage plans. You probably saw The Times article about this in March. It said in part, "Half of large employers offering benefits to Medicare-age retirees have contracts with Medicare Advantage plans nearly double the share from just a few years ago in 2017," that's according to the Kaiser Family Foundation, "and roughly 44% don't give retirees a choice to use traditional Medicare within their programs. Most cited lower costs as the reason." Anything to add to that about the national context?

Caroline Lewis: Yes. I think there is one important point here, which is that part of what the concern was there is that some people stay on these plans and-- I will say this is part of the concern in general. Sometimes people voluntarily enroll in a Medicare Advantage plan, sometimes they're pushed onto it, and there's this idea that it's hard to reverse that decision because if you want to go on traditional Medicare later with a Medigap plan, Medigap plans after the first six months in many states can either decide to reject you or charge more if you have a preexisting condition. In New York, there are protections against that. I do want to say that if people decide to try it out, it is more reversible here than in other parts of the country.

Brian Lehrer: Oh, and I should ask you, is there any indication of what might happen next for municipal retirees? Because it's worth repeating that this is only a temporary pause on the shift to Medicare Advantage plans that the court imposed on Friday.

Caroline Lewis: Yes. It's interesting because this does seem like a very friendly judge for the retirees. He basically said that part of why he granted the temporary restraining order is because the case is likely to succeed on its merits. Then separately, there was recently a bill introduced in the city council to try to preserve the existing coverage as well. There's a couple of potential paths through which things might change.

Brian Lehrer: Caroline Lewis on the healthcare beat at the health and science desk on that team for WNYC and Gothamist. Thanks so much for so many details. People felt very served. I can tell by our phones and our texts from all your answers. Thank you very much.

Caroline Lewis: Oh. Glad to hear it. Thanks, Brian.

 

Copyright © 2023 New York Public Radio. All rights reserved. Visit our website terms of use at www.wnyc.org for further information.

New York Public Radio transcripts are created on a rush deadline, often by contractors. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of New York Public Radio’s programming is the audio record.