A New York State Supreme Court judge has permanently blocked the implementation of New York City's plan to switch 250,000 retired city employees from traditional Medicare to an Aetna Medicare Advantage plan.
In a ruling issued Aug. 10, Judge Lyle Frank wrote that the city is "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."
Mr. Frank had previously issued a temporary stay on the plan on July 10, siding with a group of retirees who filed a lawsuit alleging offering Medicare Advantage as the only option for retirees violated the city's obligation to provide health benefits to its retired workers.
The contract, which would provide coverage for 250,000 retired New York City employees and their dependents, was one of Aetna's largest contracts in history, CVS Health CEO Karen Lynch said in May. The contract was worth $15 billion over five years, according to Aetna.
A spokesperson for New York City Mayor Eric Adams told the New York Daily News the city is "extremely disappointed" in the ruling and plans to appeal the judge's decision.
The city has been trying to implement a Medicare Advantage plan for retirees since 2021, which Mr. Adams said would save the city $600 million each year. The proposal faced backlash from retirees, who expressed concerns a Medicare Advantage plan would have higher out-of-pocket costs and more limited networks than the Medigap plan the city previously provided retirees.
Under the city's plan to implement the Aetna contract, retirees could opt out of the program for traditional Medicare, but would have to pay for any supplemental coverage out of their own pockets.
Becker's reached out to Aetna for comment and will update this article if additional information becomes available.