Judge rules against Mayor Adams Medicare Advantage Plan for NYC retirees

A significant legal development has unfolded as a trial court judge ruled against Mayor Adams’ proposed switch of hundreds of thousands of retired city workers to a cost-saving Medicare Advantage Plan.

The decision to block this mandate has stirred attention and discussion, with the city already expressing intentions to appeal.

Manhattan Supreme Court Judge Lyle Frank, who had temporarily halted the implementation of the plan pending a final judgment, issued a ruling on Friday that bars the city from making the Aetna Medicare Advantage Plan the exclusive premium-free option for retirees.

Instead, the city is obligated to continue offering retirees the choice of traditional Medicare.

The ruling states, “Respondents are permanently enjoined from requiring any City retirees, and their dependents from being removed from their current health insurance plan(s), and from being required to either enroll in an Aetna Medicare Advantage Plan or seek their own health coverage.”

This latest legal action stems from a lawsuit filed by nine retired municipal workers and the NYC Organization of Public Service Retirees in May.

The suit follows a prior legal challenge last year aimed at preventing Mayor Adams from rolling out an earlier version of the Medicare Advantage plan.

Mayor Adams’ team introduced a revised proposal this year that eliminates traditional Medicare as an option, effectively making the Medicare Advantage plan the sole healthcare insurance available to approximately 250,000 municipal retirees.

The city’s argument was based on compliance with court orders, citing the removal of an unlawful penalty highlighted in the initial lawsuit.

Mayor Adams signed a contract with private health insurance provider Aetna in March, scheduling the enrollment of retirees in the plan to begin on September 1.

However, just before a critical deadline that would have necessitated opponents of the plan to opt out, Judge Frank issued a temporary restraining order.

He emphasized that “the city had made numerous commitments to current and future retirees regarding their healthcare coverage.”

According to court documents, Judge Frank asserted that “numerous promises were made by the City to then New York City employees and future retirees.”

The spokesperson for the retiree group leading the lawsuit, Marianne Pizzitola, expressed satisfaction with the ruling, stating that it vindicated their concerns about the proposed changes.

She highlighted that the judge based his decision on the concept of “promissory estoppel,” underscoring that promises made by the city regarding healthcare should be honored.

The city has confirmed its intent to appeal the decision, expressing disappointment.

The mayoral spokesperson, Jonah Allon, pointed to enhancements in the proposed plan, including a lower deductible, a cap on out-of-pocket expenses, and additional benefits spanning transportation to fitness programs.

The city also emphasized the estimated annual savings of $600 million, a critical aspect given the ongoing fiscal and economic challenges.

The ruling stated that the city did not seek additional arguments on the matter, implying a swift move towards the appeals court.

A representative from the Municipal Labor Committee noted that both the city and union officials agreed to expedite the appeals process for a definitive resolution.

Unlike the conventional Medicare system, Medicare Advantage plans are managed by private health insurance companies and receive higher federal subsidies.

Mayor Adams argued that this arrangement could lead to significant savings, especially as the city faces substantial budget deficits in the foreseeable future.

During the legal proceedings, an attorney representing Aetna acknowledged the potential for certain medical services to be denied or unavailable under the Medicare Advantage plan, raising pertinent concerns.