Dollars and sense: Medicare Advantage for retirees can work well, with proper oversight

The Municipal Labor Committee has handed Mayor Adams a win but no doubt set up future battles in approving the latest version of the proposed Medicare Advantage plan for retirees.

Former employees who have opposed the shift are correct to point out some of the general concerns related to these plans, including a system of pre-authorizations that can delay necessary care and second-guess medical providers’ decisions about patient need, as well as a diminished pool of in-network doctors.

Yet this isn’t an off-the-shelf product identical to other Medicare Advantage plans. The city has spent months using its significant economic heft to get insurer Aetna to tailor a plan to the city’s specifications, including a far smaller list of procedures subject to prior authorization with a commitment to engage in periodic reporting about denials and rationalizations.

The vast majority of doctors who accept the expiring SeniorCare program will also take the Medicare Advantage Plan. Aetna will cap annual deductibles lower than the current program, as well as institute an out of pocket maximum of $1,500 a year. The insurer’s profit motives will no doubt push it towards skimping on care, which is why the city is rightfully committing to continuous monitoring.

Detractors point to examples of negative impacts, such as a person living in an assisted care facility that may require residents to maintain traditional Medicare. These cases are to be taken seriously, and the city should intervene directly with providers to ease any potential friction. Yet policymaking for hundreds of thousands of people cannot be made on the basis of possible hitches in specific cases, and the fact of the matter is that the Stabilization Fund must be replenished.

The city erred in raiding the fund for unrelated expenditures, and should commit to leaving it for its intended purpose. If it wants to find additional savings to help smooth things along for retirees, a nominal premium for active employees, who stand practically alone among public sector employees nationwide in paying no premiums at all, is worth discussing.

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