This story originally appeared in New York Focus, a nonprofit news publication investigating power in New York. Sign up for their newsletter here.
NEW YORK STATE · July 9, 2024
How Upstate Retirees Fought Privatized Health Care And Won
Medicare Advantage plans are spreading across upstate New York, despite a reputation for denying care. In Cortland County, retirees kept it at bay.
By Chris Stanton , New York Focus
When retired public sector employees in Cortland County received a letter last July announcing the county legislature’s intent to privatize their health care plan, it struck some as an inevitability. Medicare Advantage seemed to be everywhere. Sales representatives pushing the privately run alternative to traditional Medicare had already convinced nearby Chemung and Tioga counties, among others, to move their retirees over to one of their plans, seemingly with little pushback from the affected seniors.
Then something unusual happened. Instead of accepting the change and hoping for the best, Cortland retirees sued the county and won. The county legislature reversed course, and the retirees kept the plan they had been promised throughout their careers.
Medicare Advantage has exploded in popularity across upstate New York in recent years, as it has nationwide. Much of that growth has been driven by individuals signing up for the heavily advertised plans, but more and more employers (in both the public and private sectors) are cutting costs by shifting their retirees over to Medicare Advantage. While the plans often come with low upfront costs and enticing perks like hearing and vision coverage, they’ve also gained a reputation for improperly denying and delaying care through opaque processes like requiring prior authorization, all while costing the federal government more than traditional Medicare.
In perhaps the most high-profile example, first reported by New York Focus, New York City has repeatedly tried to move its approximately 250,000 retirees onto an Advantage plan, only to be thwarted by litigious seniors. Advantage salespeople have been met with less organized resistance upstate — where an individual county might only have 400 retired employees — and have established a pattern of quickly pushing the change through county legislatures, sometimes before all the affected seniors even know what’s going on.
That might have happened in Cortland County, too, if not for grizzled local attorney Edward Goehler.
Goehler worked for the Cortland County Public Defender’s office for 17 years. Now in his late 60s, he’s entitled to the county’s retirement benefits — including its health coverage, a combination of traditional Medicare and a supplemental plan paid for by the county. Goehler’s wife and 23-year-old son also receive health insurance through his retirement plan, which he said works well for the three of them. If the county forced its retirees onto an Advantage plan and he preferred to stay on traditional Medicare, he would have to opt out of his retiree health plan, and his wife and son would lose their coverage. If that had happened last year, Goehler says, it would have disrupted “serious” appointments for his wife’s eye treatments. When he received the county’s letter last summer, he convened a group of retirees to figure out what they should do.
Many had heard Medicare Advantage horror stories of patients being forced to switch doctors or providers needing to wait for insurers’ approval to prescribe urgently needed medication. Traditional Medicare, they knew, was accepted just about everywhere in the United States, no questions asked, while private plans typically restrict you — to some degree — to providers in their network. Advantage plans, they had heard, also require prior authorization, which can sometimes delay or deny care to patients who need it.
After several informational sessions, the county legislature held a procedural subcommittee meeting in mid-August about the planned switch, which turned tense when retirees in attendance voiced their concerns. Representatives from the Broome County Purchasing Alliance, which buys Advantage plans on behalf of counties and localities, gave a slideshow presentation assuring the audience that their product, a UnitedHealthcare Medicare Advantage plan, was the best on the market. (Comparing it to the plan that New York City retirees rejected, a representative said it was “totally apples and nuts, not even apples and oranges.”) As retirees asked questions, a common refrain emerged: They thought this was happening too quickly, and wanted the legislature to at least slow down and give them time to understand the new plan. (UnitedHealthcare did not respond to requests for comment.)
“Medicare Advantage plans do not exist primarily to serve beneficiaries. They exist to serve investors.”
—Don Berwick, Harvard Medical School
Instead, the legislature put its foot on the gas. It moved up a planned vote and passed the resolution, 10-6, nine days after the subcommittee meeting. (County legislators who supported the switch to Medicare Advantage did not respond to interview requests.) The retirees would be on the new plan by January 2024, less than six months after they received that first letter.
“The subcommittee members watched the slideshow and listened to the salesmen and all go, ‘Yep, sounds good!’” Goehler said. In his view, the county’s part-time legislators were outclassed by the for-profit insurance industry, which dazzled them with claims that the county could provide its retirees with better health care along with new perks like vision and dental coverage, all while cutting costs.
Inspired by the New York City retirees, Goehler put together a lawsuit. Working pro bono, he contacted as many of the county’s retirees as he could find, some of whom had moved out of state or were in poor health and unaware that the change was even happening. The county has 376 retirees, but its retiree health plan covers 564 people, including spouses. Goehler drove around collecting signatures, often meeting up with retirees in parking lots.
Sharon Oursler, a 78-year-old who worked for 34 years in the county’s Planning Department, had to get a notary to come to her house because she was recovering from a broken knee. (Would the new plan disrupt her care? she wondered.) “It almost felt like there was nothing we could do about it,” Oursler said. “They were going to switch us over. Nobody really wanted it. Nobody was for it.” Racing the clock, Goehler filed the lawsuit with more than a hundred signatures, with retirees still calling him to see if they could add their names.
“The only way to stop it was a lawsuit,” he said. “They weren’t gonna stop. They weren’t gonna listen to us.”
Over the last two decades, Medicare Advantage plans have proven wildly successful at attracting seniors away from traditional Medicare. Thanks to the lucrative nature of their deal with the federal government, private insurers are able to offer perks that traditional Medicare doesn’t, from reduced co-pays to gym memberships to annual out-of-pocket spending limits. Drawn in by low upfront costs and aggressive marketing, seniors have signed up in droves.
As of last year, more than 32 million seniors nationwide were enrolled in Medicare Advantage, meaning Advantage plans now account for just over half of all Medicare beneficiaries. Eventually, the program’s dominance could amount to an “existential crisis” for traditional Medicare, according to Don Berwick, former head of the federal Centers for Medicare and Medicaid Services.
Over that same period, insurers have innovated new ways to juice the program for profits. While its proponents once argued it would reduce government spending, Medicare Advantage now costs the government 6 percent more per enrollee than traditional Medicare does, some of which is attributable to practices like “upcoding,” in which insurers make their beneficiaries appear sicker than they really are in order to secure bigger payments from the government. (In 2022, that led to the government overpaying Advantage plans by $20.5 billion, according to MedPAC, a federal agency that oversees Medicare.) With supercharged profits, insurers then lure in seniors with even better deals, locking the government into a costly cycle. After all that, Advantage enrollees are about as satisfied, on average, with the level of care they receive as seniors in traditional Medicare are, according to KFF.
“Medicare Advantage plans do not exist primarily to serve beneficiaries,” Berwick said. “They exist to serve investors.”
Generally, they’ve served those investors well, particularly in the cases of UnitedHealthcare and Humana, which together control almost half of the Medicare Advantage market. In their rush to get a piece of the pie, insurers have targeted not just individuals, but also public sector employers and the dwindling number of companies that still provide pensions, emphasizing the possible savings to create a sense of urgency around the switch.
In Cortland, that rushed timeframe — coupled with what they saw as an air of secrecy around the initial negotiations — alarmed retirees. Moving everyone over to the new plan would take a few months, they were told, but then why not wait until next year to start the process and give everyone time to get comfortable with it? If they did that, some county legislators argued, the county would miss out on a year of savings. Cortland County, like many employers that offer health coverage to retirees, pays for a supplemental plan to round out coverage provided by traditional Medicare, which covers 80 percent of most services. In switching to an Advantage plan, the county would no longer have to pay for the supplement, and could effectively shift more of the cost onto the federal government, which would then pay UnitedHealthcare a certain amount per Advantage enrollee. Sweetening the deal, New York state would also offer a one-time match for the first year of savings through its County-Wide Shared Services Initiative, which encourages local governments to cut costs through collaboration.
Even some county legislators, though, were confused by the sense of urgency, including Beau Harbin, who voted “no” on the change and said that legislators were still scrambling to understand the new plan when the resolution was on the floor. To retirees, the frantic nature of it all seemed intentional. “They didn’t want to give us a minute to think about it,” Oursler said.
Doug Bulman, the Broome County Purchasing Alliance’s founder, attributes the timeline to UnitedHealthcare’s October 1 deadline, but blames the county for not spending more time educating its retirees on the plan.
“They didn’t want to know about it because they weren’t going to participate no matter what.”
—Doug Bulman, Broome County Purchasing Alliance
This wasn’t the only time that Bulman’s group has rushed this change through a county legislature, though. In nearby Lewis County, the switch to Medicare Advantage unfolded over almost the exact same timeline last year, with sales presentations in August followed quickly by a vote. Seniors there also protested the change was happening too fast, though they did not mount a lawsuit in time to stop it. In 2021, Tioga County had followed a similar timeline for its switch to Medicare Advantage as well.
Still, Bulman insisted that the over 20 municipalities he has sold his plans to have had “not one grievance,” and claims the typical Medicare Advantage problems that Cortland seniors highlighted in their lawsuit do not apply to his plans. “Not one of those accusations the Cortland County retirees made was true about our plan,” he said, pointing out that his own parents are on one of his plans. “Not one.”
His plan, he said, utilizes UnitedHealthcare’s “passive PPO,” meaning it has a more expansive coverage network than a typical Advantage plan. If a provider accepts traditional Medicare, Bulman said, they’ll accept his plan, even if they’re out of network. Thus, Cortland retirees likely wouldn’t have to change doctors — though “never say never,” Bulman said. As for prior authorization, Bulman pointed out that it is also used by the Cortland seniors’ current Excellus supplemental plan. “It is a hassle,” he admitted, “but it’s there to lower costs.”
To the retirees, that all sounded too good to be true, and prior authorization proved a sticking point. Advantage plans issue millions of prior-authorization denials per year, and in a 2022 report, the Office of the Inspector General found 13 percent of them were for procedures that met Medicare coverage rules. If prior authorization wasn’t a big deal, Cortland seniors wondered, then why wouldn’t UnitedHealthcare provide a list of procedures that would require it under the new plan until after the county had already committed to joining? When the retirees finally got ahold of the list, it contained dozens of procedures ranging from routine tests to colonoscopies to rehabilitative care.
Seniors also worried about the difficulty of navigating the new plan as they got older and explaining the special “passive PPO” to providers who might not even know what that was. Deborah Walls, a retiree who worked for the county’s Office for the Aging for 16 years and provided health insurance counseling as part of her job, considers herself adept at navigating health care issues. Last year, amid the county’s Medicare Advantage drama, she underwent open heart surgery. As a test, she asked her various doctors if they accepted the UnitedHealthcare plan. “I could not get straight answers,” she said. “But if I asked them if they took traditional Medicare? ‘Oh, yes.’”
Beyond their preference for the simplicity of traditional Medicare, Cortland seniors kept coming back to the notion that the county was trying to renege on a promise. “I’m set on the plan that I worked 34 years for, and paid for, and that’s working perfectly well for myself and my husband,” Oursler said.
In the end, the lawsuit worked. A New York State Supreme Court justice ordered the county to temporarily block the insurance change amid litigation in September. In November, the legislature reversed course and rescinded the change, rendering the lawsuit moot. By blocking the county’s attempt to push them onto the new plan, the Cortland seniors became the latest in a wave of retirees around the country, including in New York City and Delaware, who have prevented their former employers from forcing them onto Medicare Advantage — and they did so with a single lawyer working pro bono.
“Ed’s a tough cookie,” Walls said. “I wouldn’t want to go against him in a court case.”
For his part, Bulman wishes the retirees would’ve approached his plan with an open mind. “We set up several meetings for the retirees. They absolutely would not come,” he said. “They didn’t want to know about it because they weren’t going to participate no matter what.”
While the retirees fear the county could try again, Harbin hopes his colleagues in the legislature set their sights elsewhere. “It’s not on [retirees’] backs that we should be making these changes,” he said, arguing that an estimated $316,000 in annual savings isn’t that much relative to the county’s $155 million budget. “I believe we can find that money elsewhere.”
In the meantime, Goehler isn’t leaving anything up to chance, and has continued to build a case against the county even after its reversal. Longer term, he’s hopeful about bipartisan legislation that’s been floated in the New York State legislature, which is aimed at preventing public employers from forcing their retirees onto Advantage plans or diminishing their health care benefits. (The New York City retirees have thrown their weight behind it, as well.)
“We’re hoping that happens,” Goehler said, “so I never have to do this again.”