House Sends Governor Bill Bailing Out Wobbly Health Care Plan for Retired Texas Teachers

AUSTIN -- House members on Wednesday approved and sent to the governor a plan for rescuing Texas' insolvent health insurance program for retired teachers.For the House, it was a slimmed-down bailout.The bill would add about $484 million of new money into the Teachers Retirement System of Texas' "TRS-Care" plan over the next two years -- $350 million from the state and $134 million from school districts.Earlier, the House had offered $500 million from the state, out of rainy-day dollars.The Senate, which has insisted the state savings account only should be used for "one-time expenses," would not go along.However, bill author Rep. Trent Ashby praised the Senate for adding to the package a $20 million boost for retirees who are under 65 - generic prescription drugs at no cost."This is really going to be beneficial," said Ashby, a Lufkin Republican.The pension system provides health insurance for more than 260,000 retired educators and their dependents, about 50,000 of them in Dallas, Collin and 11 other counties.For months, Ashby and Senate sponsor Sen. Joan Huffman have warned that without additional money and the ability to dial back recipients' benefits, TRS-Care probably would enter a "death spiral" sometime in the next two years.Higher premiums in current policies would stampede beneficiaries into a legally required "no cost" plan, which couldn't get by on state and school district contributions alone, they said. It would have to shut down, they said.The bill House members sent to Gov. Greg Abbott by a vote of 139-0 would end the requirement of the no-cost plan. The measure also would give TRS-Care managers more flexibility in changing the health plans -- to raise premiums and copays, or trim services covered of out-of-pocket maximums.Money to pay for enrollees' care is cobbled together from participants, federal Medicare funds and contributions from school districts, their active employees and the state. The district, active employee and state shares are based on districts' current payroll.A plan like few othersBut it's unlike almost any comparable public or private health plan for retirees. About 95 percent of Texas' retired educators haven't paid into Social Security. For many, their TRS pension checks are their only source of income. Some retired teachers make as little as $24,000 a year; and janitors, $12,000.Since 2001, the Legislature has provided only one cost-of-living adjustment -- for complicated reasons related to the pension fund's actuarial soundness. To offset the pain, budget writers often insert "intent" language urging TRS trustees not to raise premiums on the health care side.For 12 years, premiums haven't been raised, though last September, trustees imposed $40 million more in copays and other cost sharing.If Abbott signs the bill, TRS-Care is expected to move all retirees 65 and older into Medicare Advantage."Non-Medicare-eligible retirees," many though not all of them under 65, would enroll in a plan with a $3,000 deductible and monthly premiums starting at $200 a month (rising to $370 over four years).Under-65 retirees could leave TRS-Care and come back and enroll when they turn 65. Currently, an early retiree who exits cannot re-enroll.As rewritten by Huffman, a Houston Republican, the bill would wipe out a projected shortfall for 2018-2019 of $1.06 billion, according to a fiscal note by the Legislative Budget Board. Instead, TRS-Care should wind up $203.7 million in the black, the board estimated.Tim Lee, executive director of the Texas Retired Teachers Association, said that because not all of lawmakers' proposed cash infusion is locked into the payroll-based state contribution, the bill "will already have us start in the hole next biennium."Still, the bill provides a much better horizon than a $1.1 billion shortfall, said Lee, whose group supported it.  Continue reading...

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