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Health care

The following FAQ answers commonly asked questions about the national health care crisis, its impact on New York City employees and retirees, and the challenges facing the UFT and its fellow municipal unions. Answers about more recent issues are listed at the top, followed by our complete FAQ on health care. See a timeline of events on health care negotiation.

Newest health care FAQs

We recently heard that the city is threatening premiums on in-service workers in the near future. How would the city be able to charge active municipal workers a premium without violating Section 12-126 of the city's administrative code when the code explicitly prohibits such premiums?

Just because a certain plan has been offered premium-free in the past does not mean the administrative code requires it to be in the future. The current health benefits are a combination of statutory provisions and collective bargaining.

Section 12-126⁠—as currently written, and without the amendment the unions are pushing for—only provides that the city covers the cost up to the HIP rate. The GHI-CBP plan, the most popular option by far for in-service employees, is only provided premium-free as a result of collective bargaining. It is paid for from the city's stabilization fund. Without the collectively bargained agreement to “equalize” the HIP and GHI rates, in-service employees and retirees not yet eligible for Medicare would have to pay the difference between the HIP rate and the cost of the GHI-CBP plan. Nothing in the city's administrative code prevents the city requiring employees to pick up the difference. See a chart comparing what could happen to health care benefits if the code is changed or if it remains the same.  

It has been the unions in the Municipal Labor Committee that have fought for the GHI-CBP plan to be and remain premium-free for all these years. See this graphic that details the proposed changes to the administrative code.  

Complete FAQs on health care

Why is health care such a major issue right now?

The escalating cost of health insurance, prescription drugs and medical care across the country has created a national crisis. Hospitals and drug companies are charging increasingly exorbitant amounts, and New York City is no exception. In the last 20 years, according to the U.S. Bureau of Labor Statistics, national hospital costs have tripled and other medical charges have more than doubled, far outpacing increases in average family income. In 10 years, New York City’s spending on health care for its employees will go from $6.4 billion annually in 2013 to a projected $11.8 billion in 2023. The rate of increase is unprecedented, and it is an issue that must be addressed.

The UFT and its fellow unions in the Municipal Labor Committee (MLC) have been a shield for in-service and retired members from these escalating costs, but the unions and all of their members are still responsible for the payment of health insurance as they have always been.

New York City is one of the last large cities to offer premium-free health care to its employees. Most Americans, including most unionized public employees outside New York City, pay premiums and deductibles. Many workers have found that even with pay increases, they are earning less money because of the health care costs coming out of their paychecks.

How could the national health care crisis affect the UFT and its members?

With its large price increases year after year, the health care industry is pressuring the city and the MLC to add premiums. The UFT and its fellow unions in the MLC believe there is a better solution: aggressively leverage the size of New York City’s municipal workforce to battle insurance companies and get medical providers to deliver services more efficiently and at less cost. It’s the approach we have taken for the past decade. The city, with the support of the MLC, is seeking proposals from health care companies on how they can deliver the same or improved benefits for 10% less.

Almost every municipal contract, including the DOE-UFT contract, has now expired. In late September, the Adams administration began contract negotiations with District Council 37, the largest city union. At their first bargaining session, the city told DC 37 that health care must be resolved before the city would provide the pay increases its members deserved. The city took a similar stance with the UFT at their first negotiation session on Oct. 13.

What is the stabilization fund and how does it relate to health care?

The stabilization fund was originally created in 1984 to equalize costs between the city’s two health insurance options at the time. In the decades since, the city and its unions have also used the fund in a variety of ways, such as offsetting members’ costs for PICA drugs (such as chemotherapy and injectables), subsidizing the cost of retiree prescription drug riders, shoring up various union welfare funds facing fiscal uncertainties and paying survivors’ benefits to the widows of uniformed officers.

All fund decisions are made jointly by the city as represented by the Office of Labor Relations and the city labor unions as represented by the MLC. The fund has benefited the members of every municipal union.

Did unions borrowing from the stabilization fund cause our current health care crisis?

No. When the city and the MLC agreed in 2014 to use funds from the stabilization fund, to help pay for salary increases for all city workers between 2015 and 2018, the funds that were drawn down were completely offset by $1 billion in cost-saving measures in health care that the union and city worked together to generate over that same period.

Most importantly, not a single health care benefit was either lost or diminished during that three-year period as a result of these cost-saving measures. In fact, some health care benefits were actually enhanced. You can see detailed reports issued by the city for Fiscal Years 2015-2018 and Fiscal Years 2019-2021 that outline the health care savings and how those savings offset the funds drawn from the stabilization fund to help pay for salary increases.

Statements that the stabilization fund was raided for in-service salaries and benefits at the expense of retirees are false. What is happening is the skyrocketing cost of health care has depleted the stabilization fund and is making it difficult to keep our current health care plans sustainable.

What was the New York City Medicare Advantage Plus Plan that was created for city retirees?

The New York City Medicare Advantage Plus Plan, negotiated by the MLC, was a totally new, unprecedented version of Medicare Advantage that was ONLY for New York City municipal retirees and their families. Read our fact sheet: 7 things to understand about Medicare Advantage and NYC retirees

Even though it was different from traditional HMO-style Medicare Advantage plans, categorizing it as a Medicare Advantage plan made the new plan eligible for $600 million annually in federal subsidies. The new plan provided the same excellent benefits as the current GHI SeniorCare health plan for retirees but at less cost. UFT retirees would have had access to every doctor or health care facility that accepts traditional Medicare coverage.

The plan stalled at first because of the poor rollout of information to medical providers and Medicare-eligible municipal retirees. The distinction between the new plan and individual Medicare Advantage plans was not made clear to medical providers so many of them initially indicated to retirees that they would not accept it because they were misinformed.

The ensuing panic led to the filing of a lawsuit. In his ruling on that lawsuit, a state judge found no issue with the NYC Medicare Advantage Plus plan, but he misinterpreted the Administrative Code of the City of New York, Section 12-126. As a result, the MLC is seeking to add a clause to strengthen that code (For details, see the later question on the administrative code). 

The proposed NYC Medicare Advantage Plus plan was not implemented and remains in ongoing litigation. Medicare-eligible New York City retirees will remain in their current health plans for now.

Was the NYC Medicare Advantage Plus plan an effort to privatize Medicare?

No, this new plan negotiated by the MLC and the city was, in fact, a Medicare program. We were able to access federal funding because it is a public program.

Privatization in health care refers to when health care systems are run by private insurance or health care companies. The health care of New York City employees and retirees has largely been provided by private companies such as EmblemHealth/GHI. Programs such as Medicare are public programs run by the federal government.

Individual Medicare Advantage plans have restrictions and leave subscribers with fewer medical options and/or higher out-of-pocket costs. The new plan was a custom, large-group version of Medicare Advantage developed for New York City municipal employees only. It was modeled after GHI SeniorCare and was filled with features that made it the same or better than current GHI SeniorCare but at lower cost to the city.

While the new NYC Medicare Advantage Plus Plan bore the same (unfortunate) name, it had none of the issues that people have experienced with individual Medicare Advantage plans.

Why are municipal unions seeking to change the city’s administrative code?

A state judge’s recent ruling illuminated an issue with a part of the administrative code (Section 12 -126) that allows for a dangerous interpretation. The judge said the administrative code required the city to only offer premium-free plans. Such a mandate would eliminate the MLC's and the city's authority to offer multiple health care plans, since the city and the MLC would be unable to absorb the cost of multiple premium-free plans.

The MLC is asking the New York City Council to add a clause to the administrative code to codify the past practice of the last several decades allowing unions to be able to negotiate health care costs and give health-care plan options to members. See this graphic that details the proposed changes to the administrative code.  

The administrative code would continue to require the city to provide a comprehensive, premium-free health plan. The additional clause would only strengthen the current code by clarifying and reaffirming the MLC’s right to negotiate for all members and ensure the city must offer options when it comes to health care plans.

Without this change in code, the city may choose to save costs by offering only one health care option that isn’t up to our standards. See a chart comparing what could happen to health care benefits if the code is changed or if it remains the same.

What is the union’s stance on the New York Health Act?

The New York Health Act (NYHA) would create a single-payer system with the goal of providing universal health care for all New York State residents. The program would be the first of its kind in the country, and it would replace all existing forms of health care coverage, including private insurance, employer-sponsored plans and government-operated systems such as Medicare and Medicaid. It would provide the same health care coverage for all New Yorkers.

While the UFT, of course, is in favor of health care for all and working to fix inequities in our current health care system, we also understand the fragile balance between the economy, health care and the government. 

We are also concerned with the bill’s proposal to raise taxes by $250 billion to pay for health care. State taxpayers would bear the burden of the state’s health care costs, which could deplete Albany's budget for other tax-funded programs, including education. With the state’s economy struggling to recover from the pandemic and a recession looming, these higher taxes would have a crippling effect.

The health care system in New York would immediately be placed in the control of Albany,which would have to create a completely new operational entity to run the health care of the entire state.

A health care change of this scope and ambition must be tackled on a national level.