Teachers’ union withdraws its support for Medicare Advantage pact, following retiree election upset

A man in a suit with a dark blue tie stands at a podium next to a man in a suit with a pale blue tie.
UFT president Michael Mulgrew talks at City Hall about reaching a contract agreement for teachers, June 13, 2023. (Ben Fractenberg/THE CITY)

This story was originally published on June 24 by THE CITY. Sign up here to get the latest stories from THE CITY delivered to you each morning.

The United Federation of Teachers announced on Sunday that it has withdrawn its support for health care cost-saving efforts to switch retired employees and their elderly or disabled dependents to Medicare Advantage.

In a letter to the Municipal Labor Committee, a consortium of 102 public sector unions, UFT president Michael Mulgrew said the union — the city’s second-largest — was withdrawing its support, accusing the administration of Mayor Eric Adams of being “unwilling to continue this work in good faith” as health care negotiations for current city workers and pre-Medicare retirees drag on.

In a phone call with THE CITY Sunday evening, Mulgrew said retirees’ strong opposition and an appellate judge’s decision last month upholding an earlier ruling that blocked the switch informed the union’s move to back out.

Last week, an opposition group that campaigned on blocking the health care switch trounced the UFT-backed slate in retiree chapter elections for the first time in the chapter’s 40-year existence.

“The courts have spoken. My members have spoken. We’re having a big problem with the city now on this other thing,” said Mulgrew. “Why are we continuing to cause this — for our members, for the retirees of New York City who worked for our city — this anxiety, and fear and all sorts of other things?”

The about-face is the latest pushback against the joint union-City Hall pact to switch the city’s 250,000 civil service retirees to a privatized Medicare plan, part of bargaining on health care savings that helped fund raises for city workers starting under former Mayor Bill de Blasio.

Medicare Advantage was scheduled to take effect last September before a Manhattan judge tossed it last summer. After its appellate court defeat, the Adams administration said it intends to bring the matter to the state’s top court.

The Municipal Labor Committee, including the UFT, agreed to the planned switch under former Mayor Bill de Blasio, as part of a pact that aimed to save the city $600 million annually in order to help cover the cost of wage boosts and benefits. Last winter, the MLC voted to approve a contract with Aetna to administer the health plan.

Retirees who filed the suit argued that the switch from traditional Medicare violated past guarantees about coverage and would increase their health care costs while making it more difficult to get approvals for procedures.

Reached for comment on Sunday, an Adams spokesperson did not comment on the UFT’s reversal.

“We have been clear: the city’s plan, which was negotiated closely with and supported by the Municipal Labor Committee, would improve upon retirees’ current plans and save $600 million annually,” Nicholas Paolucci, a spokesperson for the city Law Department said in a statement. “This is particularly important at a time when we are already facing significant fiscal and economic challenges.”

Mulgrew told THE CITY he will be asking his peers in the MLC to also withdraw their support for Medicare Advantage this week. Due to the committee’s weighted vote structure, the UFT as the city’s second-largest union has major sway to make or break decisions.

‘I found out yesterday’

The NYC Organization of Public Service Retirees, a lead plaintiff in the lawsuit, said in a statement on Sunday that it is “grateful” for the UFT’s decision and called on the city “to protect retirees’ healthcare rights and to work with retirees to find real, sensible solutions to today’s healthcare challenges.”

Asked by THE CITY about potential alternatives for cost savings to fulfill the bargaining agreements, Mulgrew did not offer suggestions. Any new course of action must be negotiated within the MLC, according to a UFT spokesperson.

Mulgrew added, in response to questions about whether he would support a future Medicare Advantage proposal: “If, unless someone comes up with something that we think works for us, then we’re not going towards it.”

The union leader played a key role in negotiating the health plan change and faced a member revolt over the issue even before this month’s retiree union election upset. Last year, an insurgent group of union retirees and current workers circulated a petition backing an internal union referendum vote for any changes to retiree or active workers’ healthcare coverage.

Harry Nespoli, the head of the MLC, said in a phone interview Monday morning that he could not comment on conversations within the committee on an alternative to the Medicare Advantage plan, and said the matter is up to the courts.

Nespoli called for an emergency executive board meeting, to take place Wednesday, and summoned the body’s steering committee Monday to address the UFT’s reversal.

“My job is to keep the MLC together and to keep moving forward with this,” Nespoli told THE CITY. “So I want to sit down with my board and find out exactly the best way to go with this thing right now. I found out yesterday morning, just like everybody else.”

Asked about whether or not the plan has a future within the body now that the UFT has dropped its support, Nespoli said he “can’t answer that without the actual decision from the courts.”

He continued: “So where are we at right now? I really don’t know. It’s a little too early.”

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