Testimony of UFT President Michael Mulgrew before the New York City Council Committee on Civil Service and Labor

My name is Michael Mulgrew, and I’m the president of the United Federation of Teachers (UFT). On behalf of the union’s more than 190,000 members, I would like to thank the members of the New York City Council’s Committee on Civil Service and Labor for holding today’s public hearing on health insurance coverage for city employees, city retirees and their dependents.

For 40 years, the New York City Municipal Labor Committee (MLC) has had the authority to bargain health care on behalf of the members of all municipal unions. In the last decade, the cost of health care has been rising dramatically, and insurance companies, hospitals and other health care providers have made it increasingly difficult to balance cost and quality. Over the long term, only action by the federal government can solve this national crisis. In the meantime, the municipal unions have been negotiating with the city on how to preserve our health care benefits. Most important, we want to maintain plans that do not cost members the thousands of out-of-pocket dollars that most workers pay.

The city needs to find savings for employee health care, and has long partnered with the MLC to find and maintain those savings while providing high quality plan options. As part of this effort, the unions and the city agreed in 2014 to find $3.4 billion in savings over four years that the city would otherwise have paid to maintain members’ premium-free plans. Those savings were achieved through a variety of methods, including negotiating with hospitals to reduce their charges, reducing the costs of prescription drugs, and introducing or expanding some co-pays for doctor visits, especially at urgent care sites and hospitals that were charging rates far above their peers. In recent years, the UFT has put pressure on New York City hospital networks such as New York-Presbyterian to reduce their charges after documenting that they billed insurance companies significantly more than some of their leading competitors. In one recent campaign, the UFT aligned with SEIU Local 32BJ in an effort to reduce hospital costs after Local 32BJ’s Health Fund found stark differences in charges for similar services in the same geographic area.

The UFT and other unions statewide recently addressed another cause for concern: "surprise" medical bills that workers received after getting emergency treatment outside of their insurance network. The union-backed No Surprises Act, which took effect on Jan. 1, 2022, limits out-of-pocket costs to no more than the in-network copay, coinsurance or deductible. We have also been strong supporters of the City Council’s recent bill to create an Office of Healthcare Accountability that would force all city hospitals to disclose what they charge for medical procedures and make it harder to engage in price gouging.

Despite these years of efforts, the escalating cost of health insurance, prescription drugs and medical care across the country has created a national crisis. The status quo is no longer an option. The MLC will not allow for compromises, which is why it is seeking an administrative code amendment to ensure we do not leave these important decisions to the city alone.

In recent litigation over a previously proposed new health plan for Medicare-eligible retirees, a judge ultimately gave the green light for the city to implement the plan. But he dealt a blow to the collective bargaining rights of municipal unions when he declared that the city could impose a single health plan on all retirees. As Justice Lyle Frank and the Appellate Division explicitly pointed out, the city need not offer any options (GHI Senior Care included) to comply with the code. The judge's ruling on the current version of the code would allow the city to eliminate all retiree options and offer only a premium-free Medicare Advantage Plan. Inaction or the filing of additional lawsuits does not make the current situation sustainable. To the contrary, it increases the pressure to eliminate choice or charge premiums for active members and pre-65 retirees.

We are asking that the City Council amend the code to restore the unions’ decades-long authority to negotiate health care benefits and preserve health plan options for retirees. The amendment would allow the city to continue to offer a high-quality, premium-free health care plan to retirees and, for those who want it, the choice of a high-quality plan with a monthly fee.

Without this legislation, the city may choose to save costs by offering only one health care option that does not meet the needs of all members. If unions lose their seat at the bargaining table, New York City’s premium-free health benefits will be in jeopardy. We support the effort of Deputy Speaker Diana Ayala and Chairwoman Carmen De La Rosa to preserve choice for retirees and collective bargaining rights for all city unions.