City Council fights Giuliani lawsuit as Bloomberg calls for full funding.

In order to compel the city to provide full reimbursement for retirees' Medicare Part B premiums, the City Council on Jan. 31 contested a lawsuit filed by the Giuliani administration.

In December, DC 37 filed a court motion to intervene in the Giuliani lawsuit, with Sr. Assistant Counsel Mary J. O'Connell handling the case.

Meanwhile, in February, Mayor Michael R. Bloomberg unveiled a budget plan that would fund the payments for the current fiscal year.

"We will keep the pressure on until the Medicare Part B law gets implemented and recipients recoup all the monies they are entitled to," said Stuart Leibowitz, president of the Retirees Association of DC 37. "We are hopeful that Mayor Bloomberg will do what's right and let the law go into effect," Mr. Leibowitz said.

"We view the budget as a possible sign that our new mayor was serious when he said he won't be as litigious as Giuliani," Mr. Leibowitz said.

"Our previous mayor was only too happy to sue when something didn't go his way - even if that meant filing frivolous lawsuits at the taxpayers' expense."

As PEP went to press, Mayor Bloomberg indicated that he would drop his predecessor's lawsuit, said Mr. Leibowitz.

Last year, the City Council unanimously approved the Medicare Part B reimbursement bill after an intense lobbying campaign by the Retirees Association and DC 37.

But Mr. Giuliani vetoed the legislation. And when the City Council overrode his veto, he filed a lawsuit to prevent its implementation. He claimed the law interfered with management rights.

Medicare Part B covers physician services, hospital outpatient care, durable medical equipment and other services rendered outside hospitals.

Four decades ago when Medicare was created, the city agreed to cover the full cost of reimbursement. But in the 1980s under the Koch administration, the city reneged on its promise of 100 percent reimbursement, and the city payments have fallen ever since. The current 72 percent reimbursement hits retirees with a shortfall of about $100 a year.

The premium is automatically deducted from retirees' monthly Social Security checks, and for decades the city has sent the annual reimbursement checks in the following summer.

Because of the dispute over the legislation, Mr. Giuliani delayed paying retirees this summer and, finally reimbursed them $384 at the old rate. Under the new rate, retirees were due $464.40.

According to Mr. Bloomberg's budget plan, the city plans to earmark $33 million for full reimbursement in the current fiscal year, $43 million in fiscal year 2003, $62 million in fiscal year 2004 and $73 million in fiscal year 2005.