What to know about NYC's controversial Medicare Advantage plan for retirees

New York City's $15 billion contract to provide Medicare Advantage to 250,000 retired city employees and their dependents is facing more court challenges. 

After years of proposals blocked by judges, an Aetna-administered Medicare Advantage contract is set to take effect Sept. 1, if a court upholds the plan. 

Here's what to know about the controversial contract, which has drawn criticism from retirees and some city officials: 

1. The city has tried to implement Medicare Advantage for years. Former Mayor Bill de Blasio first proposed a switch to a Medicare Advantage plan from the previous Medigap plan offered to retirees in 2021. The initial plan was set to take effect in January 2022. 
   
   
2. Aetna wasn't the first payer awarded the contract. The city initially handed the contract, which covers 250,000 retired city workers and their dependents, to a partnership between EmblemHealth and Empire BlueCross BlueShield. EmblemHealth administered SeniorCare, the Medicare supplement program offered to retirees. In July 2022, Empire BlueCross BlueShield pulled out of the contract, citing the city's failure "to provide a start date and details regarding the exact benefit plans New York would be offering to its retirees." 
   
   
3. Courts blocked the first contract's implementation several times. In October 2021, a judge put the EmblemHealth/Empire BCBS contract on pause, after retirees sued to block it, calling it "irrational, and thus arbitrary and capricious." After the judge blocked the plan, the city created a new option that would allow retirees to keep their supplemental coverage for a $191 monthly premium. A judge also blocked this plan, ruling the city could not penalize members for opting out. 
   
   
4. The latest contract was approved in March. The Aetna contract does not offer an option for retirees to stay on the existing SeniorCare program. Retirees can choose to opt out of the Medicare Advantage program, but they will have to pay for any supplemental coverage on their own.
   
   
5. The contract is worth $15 billion over five years, according to Aetna. The city estimates a switch to Medicare Advantage could save it up to $600 million annually. 
   
   
6. Retirees have expressed concerns about networks and out-of-pocket costs. Retirees are also concerned about prior authorizations in Medicare Advantage. "All 250,000 retirees would suddenly be subjected to the insurer's 'prior authorization' protocols and hurdles — often dangerously delaying and denying care — something they never had to worry about in traditional Medicare," Marianne Pizzitola, a retired EMT who leads the NYC Organization of Public Service Retirees, wrote in a September 2022 op-ed. 
   
   
7. The contract limits the number of services subject to prior authorization. Aetna will only require around 20 percent of the number of services it typically subjects to prior authorization in the New York City contract, Gothamist reported, and won't require any prior authorization in the first 120 days of coverage. "We heard the concerns of retirees and worked to significantly limit the number of procedures subject to prior authorization under this plan," New York City Mayor Eric Adams said in a March news release. 
   
   
8. Retirees are challenging the contract in court. In May, the NYC Organization of Public Service Retirees filed a lawsuit alleging offering Medicare Advantage as the only option for retirees violates the city's obligation to provide health benefits to its retired workers. Aetna defended the plan in court filings. 
   
   
9. City officials have squabbled over the MA plan. On June 8, city comptroller Brad Lander said he would halt implementation of the contract while litigation is ongoing. Mr. Adams responded on June 15, saying the city is within its authority to enact the contract. 
   
   
10. The contract is slated to take effect Sept. 1. Prescription drug coverage begins in January 2024, and SeniorCare will be discontinued.