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The UFT's Health Care Strategy is a Race to the Bottom
The union's new push to privatize Medicare for public sector retirees hurts everyone but insurance companies
Negotiations over a new DOE-UFT contract just started—a month after the old one expired—and already it’s looking bad. The city implied that it would not bargain over salary raises until the public sector unions can come up with additional health care savings, according to an email from UFT President Michael Mulgrew. The unions, who negotiate over health care together through the Municipal Labor Committee (MLC), have reduced the city’s liability by $4.5 billion since 2014, when they became junior partners in the de Blasio administration’s efforts to cut costs. But the 2014 health care savings agreement—which was followed by a second in 2018—was a bad move for union members. Not only did it raise costs for NYC’s public sector workers and restrict their access to care. It set a terrible precedent of exchanging health care cuts for meager salary raises, hamstringing our influence over the bargaining process as we’re seeing now.
The 2014 and 2018 agreements imposed new burdens on public sector workers. Co-pays for urgent care and hospital visits tripled in 2016, for example. A form of two-tier health care rolled out in 2018, where new hires were forced into the (still premium-free) HIP-HMO plan without the choice of enrolling in the popular GHI-PPO plan—itself a violation of the UFT contract*. Union officials justified these concessions by invoking talking points you’d expect to hear from the boss: rising medical costs are hurting the employer’s pockets, there are workers who are taking advantage of the more costly benefits (e.g., hospital visits), and besides, others have it worse. These points were repeated by UFT officials at this October’s Delegate Assembly meeting. They serve to defend past—and future—health care givebacks.
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The MLC’s newest savings scheme would throw retirees under the bus. It would force them to switch from Medicare and the Medigap insurance (which covers whatever Medicare doesn’t) that the city pays for, to a privately managed but federally-funded Medicare Advantage plan. This would save the city another $600 million a year, and the idea is to funnel that savings into the underfunded Health Stabilization Fund (HSF) to cover health care costs for in-service workers. Retirees have resisted this switch, pointing out that Medicare Advantage companies (many of whom are being investigated for fraud) are for-profit, and maximize their profit margins by withholding care from patients, through strategies such as excessive prior approvals. Retirees would be able to keep their Medicare but pay $191 monthly (double for couples) out their own pockets. This scheme would have gone into effect earlier this year, but a judge blocked its roll out. The city is required by law (Administrative Code 12-126) to offer a premium-free health plan to in-service workers, retirees, and dependents and pay the equivalent of the full cost of the HIP-HMO plan. Most people are on the GHI-PPO plan, which is slightly more expensive, so the city uses the HSF to pay the difference. The city would be breaking the law if it stopped paying Medigap insurance because it’s legally required to pay for a plan, and Medicare Advantage, again, is federally funded. The judge’s decision was a victory for retirees, who for over a year have been protesting the city as well as the union officials whom they rightfully see as complicit.
But this victory was temporary, and the MLC’s steadfast commitment to Medicare Advantage now endangers all union members. In September the MLC’s union presidents (led by UFT’s Mulgrew) voted—without consulting the rank-and-file they’re supposed to represent—to lobby the City Council to amend Administrative Code 12-126, the law that protects quality, premium-free health care. Mulgrew insisted at the October DA meeting that any amendment would preserve premium-free coverage for retirees and in-service workers alike. He and the MLC want the law amended such that the city can legally create different plan options, with different funding benchmarks, to different “classes” of individuals—in this case, in-service workers and retirees. Not only is this a lot of hoops-jumping to save money for an employer who always cries broke. It’s also quite the Pandora’s box to open. In the short-term, the amendment could mean a lower benchmark for the city’s contribution and thus the replacement of GHI with an inferior premium-free plan. Indeed, in June the city and the MLC put out a request for information from different insurance companies. In the long-term, since the amendment would eliminate equal treatment in health coverage, it would establish a precedent for the city to later group in-service workers into classes with unequal coverage.
What a mess. UFT and DC37 officials blame it on rising health care costs, but this train wreck was also caused by years of union inaction. When the 2014 health care savings agreement was made, the UFT allowed the city to use $1 billion from the HSF to pay for retroactive raises. Most public sector employees, including UFT members, had worked years under Mayor Bloomberg without new contracts and raises. The UFT’s strategy, which was no strategy at all, was to wait out Bloomberg. But in the end, Bloomberg won. Not only was he able to get the workers themselves to pay for their meager, overdue raises (unions contribute to the HSF). Bloomberg successfully enlisted the union officials to supervise the slow-motion erosion of their members’ salaries and benefits. The plan to wait out Bloomberg led the MLC, with the UFT and DC37 at its helm, to strike a Faustian bargain with new mayor Bill de Blasio—one where payment for money owed would establish a zero-sum game between raises and health care for now and forever. By not choosing confrontation, the unions got co-optation.
Decades of concessionary bargaining and top-down unionism have truly conservatized the labor officialdom. UFT officials have gone so far as to echo talking points used by ed reformers hellbent on privatizing public education. It’s tragic to witness at Executive Board and Delegate Assembly meetings. The UFT officials consecrate the idea of “choice” (of the city to provide multiple, if unequal, health plans), just as charter school companies invoke parental “choice” to plunder money and space from purposefully underfunded public schools. They insist the amendment will increase our bargaining power, but its decades-long decay is precisely how we got here, grasping at straws. They even deny that Medicare Advantage is private because it’s federally funded, revealing a spectacular obliviousness to both history and logic. School vouchers are government funded; for decades they have covered tuition at private schools for the families who use them. Medicare Advantage, unlike Medicare, is managed by big, for-profit insurance companies. Bloomberg Businessweek states, “Selling private versions of the U.S. government health program for seniors—known as Medicare Advantage plans—is among the fastest-growing and most profitable markets in health care.” UFT officials have claimed to be for federal universal health care. But if they succeed at imposing Medicare Advantage, they will have helped channel money to the greatest opponents to single payer. The UFT has really tied itself in knots, and we’re all paying for it.
We’re up against a mayor so draconian that he had cut school budgets while sitting on billions of dollars of federal COVID relief money. Labor stands a lot to lose, but also win if it can adjust its sails. Reversing the decades-long trend of givebacks would help attract and retain educators, whose growing experience will help improve academic outcomes. Fighting for pro-worker policies would help restore legitimacy that unions have lost for accommodating to pro-rich agendas. The UFT talks a big game about its influence in City Hall and Albany. Instead of robbing Peter to pay Paul, the MLC should demand that new contracts be funded, for example, by the city’s rainy day fund, its federal COVID relief fund, or the state’s stock transfer tax for which Wall Street gets rebated billions each year. The UFT should also support, rather than oppose, the NY Health Act whose implementation would remove a bargaining chip from the city. It’s a challenge, but the future of public education, and of municipal unionism, relies on achieving victories over austerity.
*Article Three, “Salaries and Benefits of Day School Teachers,” Heading G, “Health Insurance and Welfare Fund Benefits,” Section One, “Choice of Health Plans,” paragraph one of the UFT Teachers Contract reads: “The Board agrees to arrange for, and make available to each day school teacher, a choice of health and hospital insurance coverage from among designated plans and the Board agrees to pay the full cost of such coverage.”