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  Public Employee Press

PEP Feb 2004
Table of Contents
  La Voz

Public Employee Press

New health care agreement
Pact saves benefits, protects paychecks

The Dec. 18 agreement between the Bloomberg administration and the municipal unions will rescue a vital drug benefit for hundreds of thousands of workers and retirees, provide new money for union welfare funds and save $100 million in city health care costs. The pact keeps New York City employees among the few groups in the nation who do not have a percentage of health insurance premiums deducted from their pay.

DC 37 Executive Director Lillian Roberts called the agreement a “win-win” deal and pointed out that it opened the door to renewed wage negotiations.

The MLC, which includes unions representing over 300,000 city workers, ratified the deal over-whelmingly Dec. 22. In addition to the health care provisions, the pact will expand the TransitChek program to include a debit card, giving participants flexibility to vary their monthly payments. Following is a summary of the provisions:

Pay and benefits protected

  • The agreement rescues the PICA drug program, which faced elimination as costs ballooned. PICA provides psychiatric, injectable, chemotherapy and asthma drugs for 550,000 city workers and retirees. A new co-pay structure will help cut costs, which are estimated at $140 million a year.
  • While co-pays will rise in GHI/Blue Cross and Blue Shield, the HIP/HMO plan will remain without any co-pays for office and specialist visits and diagnostic services.
  • Union benefit funds will receive an additional $100 per year for each full-time worker and retiree, with pro-rated amounts for part-timers. This will help the funds cope with the rapidly rising cost of benefits such as prescription drugs, dental and optical coverage, legal services and more.
  • A major achievement of the Dec. 18 agreement is that members will not have deductions from their paychecks toward health insurance premiums. Nine of 10 major cities studied by AFSCME, DC 37’s parent union, charge employees part of the premium.

Nationwide, according to the California-based Kaiser Family Foundation, only 7.2 percent of public and private sector workers with family coverage did not have to pay a percentage of the premium in 2003. The average deduction was about $100 per biweekly check.

Early last year as it coped with a $6 billion deficit, the administration had pressed for substantial premium co-payments to be deducted from members’ paychecks.

The city also sought $600 million in benefit givebacks, including the elimination of retirees’ Medicare Part B reimbursements. For 2004, the reimbursement will be $66.60 per month for most retirees and their covered spouses.

PICA co-pays and changes
Under the agreement, beginning April 1, the PICA program will be modified.

  • Co-pays of $5 for generic drugs, $15 for brand-name drugs on a preferred list, and $35 for non-preferred drugs will be instituted for all PICA medications, replacing the current $6 charge that applies only to non-generic psychotropic and injectable drugs. Purchasers of brand name, non-preferred drugs that have generic equivalents will have to pay $35 plus the price difference between the branded and generic medications.
  • Mail order purchases of maintenance drugs will be mandatory, as in the DC 37 prescription drug benefit (see below).
  • A network of pharmacies more familiar with specialty injectable medications will be able to offer better prices under the PICA program.
  • Fertility coverage involving injectable medicines will be limited to a 90-day supply.
  • Prior authorization will be required for certain medicines.
  • The step therapy system will ensure that the most cost-effective medicine is used before more expensive prescriptions are covered.
  • Improved prices will be achieved through negotiations between the NPA division of Express Scripts, Inc. and pharmaceutical manufacturers. This process will have no effect on members as they purchase medicine.
  • For GHI participants, coverage of chemotherapy and asthma drugs will be transferred back to GHI CBP from PICA. This change will be handled administratively and will not affect members as they obtain their medications.

Changes in GHI co-pays
In the GHI/Blue Cross and Blue Shield plan, where co-pays have not been raised since 1987, the following changes will be effective April 1:

  • Primary care office visit co-payments will rise from $10 to $15.
  • Specialist co-pays will go from $10 to $20.
  • Diagnostic service (lab and x-ray) co-pays will go from $10 to $15.
  • Non-participating provider annual deductibles will rise from $175 to $200 for individuals and will remain at $500 for families.
  • Hospital inpatient co-pays will increase to $300 per admission with an annual maximum of $750 from the current $200 co-pay with a $500 annual maximum.
  • Emergency room co-pays will go from $25 to $50.
  • There will be a 25 percent co-pay on non-mandated in vitro fertilization services.

Senior Care changes
The benefits of Medicare-eligible retirees in the GHI/Blue Cross Senior Care program will also be modified. As of April 1, the medical deductible will rise from $100 to $150. Participants who have met the current $100 deductible by March 31 will need to meet the additional $50 deductible beginning April 1.

The hospital inpatient admission co-pay will go from $200 to $300 per admission as the maximum rises from $500 to $750.

Administrative fee

The agreement includes a new $35 annual administrative fee, effective in April, for each covered employee and retiree. The MLC and the city are still discussing how the fee will be paid.


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