NY’s highest court sides with city over retirees in Medicare Advantage fight

New York state’s highest court ruled against New York City retirees who have been fighting for years to block a cost-saving switch to Medicare Advantage health care. The Wednesday ruling reversed lower court rulings that protected the retirees from what they argued is inferior coverage and a deviation from the benefits they were promised as city workers.

In 2018, the city government, in concert with leaders of major public employee unions, reached an agreement to slash $600 million from the city’s health care spending. The method they eventually agreed upon was switching the city’s 250,000 retirees to Medicare Advantage, an alternative to traditional Medicare that typically comes with lower premiums. In March 2023, Mayor Eric Adams’ administration followed through on that, signing a contract with Aetna to provide a Medicare Advantage plan to retirees, triggering a lawsuit filed by retirees. Retirees have said that the switch would result in smaller networks and more out-of-pocket costs, pointing to reports that the plans can deny necessary care. 

But the Court of Appeals ruling found that the retirees who sued to block the switch to Medicare Advantage were not entitled to their “promissory estoppel” cause of action – the argument that they had been promised traditional Medicare benefits upon retirement over the course of their recruitment and employment with the city.

The ruling deals a blow to the city retirees who have organized to fight the switch – attracting political supporters and elected officials to their cause along the way. A leader in that fight has been the Organization of Public Service Retirees, led by Marianne Pizzitola. In a statement, Pizzitola said the City Council needs to focus on passing legislation that would require retirees be entitled to traditional Medicare benefits. 

“While we are disappointed in the ruling by the Court of Appeals, the solution to protecting seniors’ healthcare has always been with the City Council and the mayor,” Pizzitola said. “The next council and mayor need to do the right thing and codify protections for seniors in city law.”

Spokespeople for Mayor Eric Adams’ office and the city Law Department did not immediately respond to requests for comment on the ruling. 

“I support the retirees in their advocacy to maintain their current health insurance, and not force them into Medicare Advantage,” Council Member Gale Brewer, a co-sponsor of the council legislation, wrote on X. In a statement sent from his comptroller campaign, Council Member Justin Brannan, who also co-sponsors that legislation, decried the ruling, calling it “nonsense.” “When city workers signed up to serve, they were promised traditional Medicare,” he said. “You don’t get to change the deal after they’ve put in 30+ years.”