Democrats, Pro-Capitalist Labor Bureaucrats Are Attacking the Union Ranks
Use Union Power to Stop Gutting of
NYC Retiree / Employee Health Care
The Bosses Have Declared War – Rip Up the No-Strike Taylor Law!
UFT’s Mulgrew, DC37’s Garrido and Other MLC Tops Sell Out Union Gains
Expropriate the Health Care Corporations – For Socialized Medicine!
For over a year and a half, the New York City government has been waging an unrelenting war on the health care rights of municipal workers and retirees. City rulers are determined to gouge hundreds of millions of dollars annually out of the livelihoods of their current and former employees by curtailing their medical services and raising out-of-pocket costs. The campaign was launched in the spring of 2021 with a plan to push NYC retirees out of the premium-free Medicare + GHI EmblemHealth Senior Care onto a Medicare Advantage plan run by a private insurance company. Then-mayor Bill de Blasio along with United Federation of Teachers (UFT) president Mike Mulgrew, AFSCME District Council 37 head Henry Garrido and other leaders of the Municipal Labor Committee (MLC) insisted that this was a must-do because of skyrocketing health care costs. It was a lie then, and it is a lie now.
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They then sold this plan with more lies. The city, beginning with de Blasio and now under Mayor Eric Adams, both Democrats, claims that imposing Medicare Advantage (MA) is not privatization. Nonsense. Medicare DisAdvantage plans, as retiree advocates have labeled them, are no more public than the charter school scam: these are private outfits milking tax revenues. The city claimed (and union leaders parroted) that there would be no loss in coverage. Another lie. MA plans achieve cost reductions (and thus profit increases) in two main ways: limiting participating doctors and hospitals, and denying medical services. The initial description of the NYC MA plan said that prior approval from the insurance company would only be needed for seven procedures. Yet the contract with Anthem-Empire BlueCross Blue Shield listed 27 procedures requiring prior approval, and an advisory sent to medical providers listed 87!
A year ago, Manhattan Supreme court judge Lyle Frank ruled that the city had to come clean about what was in the Advantage plan. Then, this past March the judge ruled, on a suit by the NYC Organization of Public Service Employees, that the city could not force retirees wishing to stay in Medicare + Senior Care to pay a premium (of nearly $5,000 a year for a couple), as that would violate Section 12-126 of the New York City Administrative Code. That states: “The city will pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents,” up to a benchmark (H.I.P.-HMO) rate. Retirees breathed a collective sigh of relief. But now the Adams administration is back trying to impose a change to the city code, to allow the city to alter the benchmark plan for “any class” of recipients. This would not only affect retirees but could open the door to “tiered” coverage of in-service employees, as with pensions.
So now the battle is posed over preserving or gutting Section 12-126, which dates back to 1967 when strikes by sanitation workers and teachers roiled NYC, and won union gains. The city and MLC leaders are trying to strong-arm the City Council into approving the change, which would destroy the guarantee of fully paid health insurance for all NYC employees, retirees and dependents. Then on October 28, the NYC Office of Labor Relations sent an ultimatum to the MLC saying that if the city code is not amended by November 23, it will ask the arbitrator to impose a Medicare Advantage plan on all retirees and eliminate all other plans. The arbitrator has said he would do just that, or if the unions object, he would impose premiums of $1,250 to $1,750 annually on in-service employees (The Chief, 9 November). In an e-mail, UFT president Mulgrew used this threat to insist on gutting the city code. This is blackmail, pure and simple.
The reason for the supposed iron-clad requirement of $600 million in annual “savings” on health care costs for those covered by the NYC health benefits program is that, as part of the wage bargaining in 2018, the city labor leaders negotiated a side agreement with the city providing for $1.1 billion in “savings” over the period 2019-21, “of which $600 million will recur annually beyond FY’2021.” That money was the major source for the minimal pay “raises” agreed to that year.[1] So while the 2018 contract has ended, the city claims it can contractually enforce $600 million in health care cuts yearly for the indefinite future! And as former UFT chapter leader Arthur Goldstein noted in the Gotham Gazette (15 November), the UFT Executive Committee (of which he was a member), the Delegate Assembly and the membership were not informed of that agreement until after the contract was ratified. It was a swindle, then and now.
We are faced with a declaration of war on the unions by the capitalist government of New York City, acting on behalf of Wall Street bankers, attacking labor’s most fundamental gains. For many younger workers, who have never seen real labor struggle, the unions were synonymous with free health care – and now that is on the chopping block. Yet instead of resisting, the union bureaucracy is acting as agents of the bosses – they truly are “labor lieutenants of capital,” as socialist leader Daniel De Leon (1852-1914) put it in his memorable phrase. And from the plutocrats to the bureaucrats, they are all Democrats. But the sellout misleaders are not same thing as the unions, which are indispensable defensive organizations of the working class. The members are the union. And the 300,000 unionized in-service NYC workers together with 250,000 union retirees are a formidable force. We can bring NYC to a grinding halt, and we should in this fight, which is a crucial one for us all. Power is the only language that anti-labor, pro-cop mayor Adams and his billionaire backers understand.
What should be happening right now is preparing for a battle royal of labor vs. capital, educating the membership on what it will take to shred the no-strike Taylor Law and to wage and win an all-out citywide strike against the attack on our health care. Instead, rather than waging a hard fight within the union to take collective action, opposition groups like the Movement of Rank-and-File Educators (M.O.R.E.) and Retiree Advocate-UFT are calling on individuals to call, email or tweet City Council members. Meanwhile, there is a convoluted discussion about the ins and outs of 12-126, the 1992 MLC-NYC MOA (Memorandum of Understanding) requiring bargaining over health care, and other details of the court case. But legal maneuvering only goes so far. The judicial system is there to protect the interests of the capitalist rulers, and what the law is in practice reflects the balance of class forces. It is up to militant trade-unionists to upend the scales of bourgeois “justice” with hard-hitting class struggle.
The stakes here are not just local, and they are eminently political. The drive to privatize Medicare goes back to the administration of Republican Richard Nixon, who pushed to set up “health maintenance organizations” (HMOs) to help employers keep down costs. This was the result of a 1971 conversation between “Tricky Dick” and his friend Edgar Kaiser, founder of Kaiser Permanente, which laid out the essential idea of HMOs, summed up by Nixon aide John Erlichman as: “All the incentives are toward less medical care, because the less care they give them, the more money they make.” Medicare Advantage plans were the brainchild of Democrats Bill and Hillary Clinton, champions of “public-private partnerships,” as a cost-cutting measure after Hillary’s health care reform of pushing all workers into HMOs bombed. Again, the idea was to use private companies to rein in costs by cutting down on benefits.
The same was true of Democrat Barack Obama’s Affordable Care Act – a/k/a “Obamacare” – based on forcing everyone to buy medical insurance. Since the White House couldn’t get a “robust public option” past Congress, it sold the plan by making it a cash cow for the giant health insurance companies (which then joined in lobbying for it). The Obama administration labeled comprehensive union health care programs (like that of the NYC-MLC) as “Cadillac plans,” claiming that they “overinsured” workers by not requiring them to pay thousands of dollars out of pocket (as most “health insurance” plans do), and imposed a 40% tax on their more expensive benefits. And now we have “Mulgrewcare” (as UFT Exec Board member James Eterno has dubbed it), to force retirees into Medicare “Advantage” plans. All these schemes are based on the view that people have too much health care, and costs should be cut by soaking the workers.
The claim by Mulgrew, Garrido and other MLC leaders that their Advantage plan would not reduce benefits is ludicrous, especially after last April’s study by the U.S. Department of Health and Human Services Office of Inspector General of denial of prior authorization and payment by private health care giants. The HHS OIG cited “the potential incentive for Medicare Advantage Organizations (MAOs) to deny beneficiary access to services and deny payments to providers in an attempt to increase profits.”[2] Sure enough, it found that 13% of medical procedures denied by MAOs actually met Medicare standards, and that 18% of payment requests denied met Medicare coverage rules. Last month the New York Times[3] published an article detailing how the leading Medicare Advantage companies engaged in fraud and overbilling, including CVS Health, which is slated to provide the NYC “Advantage Plus” plan after Anthem/Blue Cross pulled out.
And it isn’t just retired city workers whose health coverage is under attack. In June, the NYC Office of Labor Relations (OLR) announced it was putting out proffers to insurance companies to replace the premium-free GHI Emblem Health plan by cutting costs “by at least 10%.”[4] Mulgrew’s absurd claim that health care savings under previous contracts with the city have not reduced benefits is belied by the fact that in 2018 alone, almost $100 million in “savings” came from imposing higher co-pays on in-service workers. The city OLR boasts that it “saved” $3.5 billion over the life of the 2014 contract, which proceeds went into the Stabilization Fund that was then raided to pay for “raises” under the 2018 contracts. The UFT leader claims he doesn’t want to set current employees against retirees, but that is exactly what he is doing by accepting the city’s ultimatum to gut administrative code 12-126 or lose premium-free health plans.
This attack is a classic example of the bosses’ divide-and-conquer techniques. It aims to set in-service employees against retirees. And it starkly shows how pro-capitalist union leaders help the employers wring concessions out of the workers, supposedly to stop things getting “even worse” – which opens the door to even more concessions, which make things worse and worse.
Over and over, we are seeing how the labor bureaucrats play ball with the Democrats to undercut union gains. Some of those opposing the Medicare Advantage attack on retiree health care are buying into the search-for-health-care-cost-savings ploy. Thus, while the Professional Staff Congress (representing City University of New York faculty and staff) has opposed the Medicare Advantage plan, PSC president James Davis has suggested various steps such as consolidating the 100 or so municipal union welfare funds for prescription drug purchasing. But the issue is not that the city doesn’t have the money to pay for top-notch health insurance, or that it faces future hypothetical budget deficits – Mayor Adams is currently sitting on a $7.7 billion surplus, much of it stashed away in NYC’s Rainy Day Fund. In any case, it is not the job of unions to fix the rulers’ money problems, but rather to defend the working people against capitalist attacks, which the sellout union tops are going along with and even spearheading.
Another demand that has been raised in the current fight is to support the New York Health Act, which would abolish the state’s existing health insurance system and set up a “single payer” government health insurance program. (UFT and other MLC union leaders oppose this call – no surprise there!) But even state-run health insurance, such as most advanced capitalist countries already have, would be facing a capitalist medical care system based on maximizing profits. It is that system, gutted by decades of hospital closures, that nearly collapsed in the COVID-19 pandemic, producing the deaths of over 65,000 New Yorkers. Rather, class-conscious workers should fight for a fully socialized medical system, from top to bottom, which can only come about through a socialist revolution.
Class Struggle Education Workers and the Internationalist Group call for the union ranks, including retired and current workers, to unite and to join with all supporters of labor rights to stop the assault on New York City workers’ health care. There should be protests of tens of thousands ringing City Hall and shutting it down, day after day. To lead such a struggle it is necessary to build a class-struggle leadership of labor defending all the oppressed. The urgent need is for a fight to oust the pro-capitalist labor bureaucrats, break with the Democrats and begin building a class-struggle workers party fighting for a workers government. n
[1] The average pay increase over the 43-month UFT contract was 7.1%. By the time the contract ran out in September 2022, the cumulative inflation in the U.S. (according to the Bureau of Labor Statistics’ Consumer Price Index) was 18.4%. Thus the pay “raises” financed by raiding the health care stabilization fund ended up as a pay cut.
[2] U.S. HHS OIG Report in Brief, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care” (April 2022).
[3] “How Insurers Exploited Medicare for Billions,” New York Times, 9 October.
[4] “City Employee Health Plan Could Switch to Lower-Cost Company Under New Proposal,” The City, 15 June.
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