The best poker players look for “tells”—signs that inadvertently signal bluffing. But sometimes the message itself is fake, designed to lure the opponent into a trap. That’s what some suspect about labor leader Harry Nespoli’s recent remark that municipal unions are “trying to negotiate cost reductions with city hospitals, but we’re not going to get anywhere.”
Nespoli is president of the Uniformed Sanitation Association and chairman of the Municipal Labor Committee (MLC), the formidable labor advisory group that has the power to negotiate health insurance contracts on behalf of city employees.
A year ago, the city and MLC tried to force 250,000 retirees into a Medicare Advantage plan. That would shift $600 million in annual insurance costs from the city to the federal budget, but at a significant cost. Health coverage for retirees would be much worse, at least according to a recent investigation by the inspector general of the federal Department of Health and Human Services. The conclusion? Some Medicare Advantage programs imposed barriers to prior authorization that denied and delayed needed care.
An ad hoc group I represent – which Nespoli dismissed as “pensioners” – challenged the city and MLC, won in court and stopped the scheme. A five-judge panel heard the city’s appeal last month and seemed skeptical of its arguments.
In response to the expected legal outcome, the city and MLC are now threatening health coverage for both retirees and working employees — unless the City Council changes the statute under which health benefits are protected (a law known as Administrative Code 12-126).
It’s a high-stakes battle with three competing goals: How can the city best provide adequate health insurance for its workforce and retirees? What did they promise to workers and pensioners? And how can the city deliver on these promises without going bankrupt?
The city spends about $9 billion a year on health insurance for its employees, retirees and their dependents. But this assessment is a bit dodgy, as the city is sparse on facts. Moreover, the MLC and some of the individual unions are remarkably irresponsible in spreading false information.
MLC’s despair is understandable. In 2014, the de Blasio administration and MLCs agreed to pay $1 billion in teacher raises by tapping into the Health Stabilization Fund. It wasn’t illegal, but it was obscene.
In exchange for these raises, the MLC agreed to find periodic health care savings to replenish the fund. But they didn’t, as that would have meant making a tough election that would have affected current union members – they all vote in union elections.
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Instead, the MLC came up with the scheme to force the Medicare Advantage plan on those 250,000 retirees who no longer represented and who no longer voted in union elections. Apparently MLC never expected these elderly and disabled people to be the first responders to challenge them in court and win. So now the city has told the MLC: Change the law or else.
Unfortunately, the Council is being asked to work in the dark. They are not getting accurate information from the city or MLC. For example, Nespoli claims that “the money that pays for … health care has run out.” It is not so. The city’s budget for fiscal year 2022 is the largest ever at $101.7 billion. And the comptroller’s report for fiscal year 2021 shows that the Health Stabilization Fund has more than $900 million in it. Meanwhile, the Council is under pressure not to even meet with the retirees who are the “backbenchers” who have identified more than $500 million in potential health care savings.
No one wants to see the city go bankrupt. And no one denies the need to find savings. But it should not be done on the backs of pensioners or based on false facts.
Fortunately, there’s a proven model that can help us chart a better course: blue-ribbon commission. The Knapp Commission, which rooted out police corruption, is one example; JSC “Municipal Assistance”, which saved the city from bankruptcy, other. Today, the Mayor and the City Council must immediately appoint such a commission to understand the real facts and propose solutions. Plus, as a confirmation of what Nespoli said, they should insist that all stakeholders are at the table.
Hospitals should be there, as should doctors, big pharma, unions, and yes, the “back” retirees. And it should be chaired by someone as informed and respected as Lilliam Barrios-Paoli, who has served the city and mayors on both sides of the aisle.
There’s an old expression: You can get it fast, you can get it great, or you can get it cheap; choose two. That won’t work here. We can’t serve our most vulnerable people well and fairly – and not go broke – unless we move this out of the back room and into the sunlight.
Cohen is an attorney at Pollock Cohen and represents the Public Service Retirees Organization in New York.