News Briefs: NYC Retirees Sue to Block Transition to Aetna-Administered Plan

Shortly after the city of New York inked a deal with CVS Health Corp.-owned Aetna to administer a PPO plan to some 250,000 retirees and their eligible dependents, a group of former city employees are suing to block Mayor Eric Adams (D) from transitioning their retiree health care coverage away from fee-for-service (FFS) Medicare. According to news reports, the class action lawsuit was filed in the state Supreme Court on May 31 by nine individual municipal retirees and the NYC Organization of Public Service Retirees, which sued to block the implementation of a previous contract with Elevance Health, Inc. (then Anthem). The original transition was supposed to begin on April 1, 2022, but the city revised its plans after a state Supreme Court judge ruled that the proposal violated city law by requiring retirees who opted out of the switch to pay $191 per month to maintain their FFS coverage. That July, Elevance backed out of the deal. In the “final approved plans, retirees who opt out of the city’s coverage will have to pay for any supplemental coverage on their own,” reports Becker’s Payer Issues. The plaintiffs alleged that the option to switch to FFS with Medicare Supplemental Insurance is cost prohibitive and that the new coverage offering constitutes nothing more than a “bait and switch,” according to Crain’s New York Business. The $15 billion pact with Aetna is expected to save the city $600 million a year.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues, including drug benefits and specialty pharmacy, for more than a decade. She served as editor of Drug Benefit News (the predecessor to Radar on Drug Benefits) from 2004 to 2005 and again from 2011 to 2016, and now manages Radar on Medicare Advantage. Lauren graduated from Vassar College with a B.A. in English.

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