HB 3976 Passes Out of the Senate State Affairs Committee, Huffman Proposes $20 Million In Prescription Coverage to Be Added

Today, May 15, 2017, the Senate Committee on State Affairs met to vote on CSHB 3976, the bill designed to prevent the TRS-Care death spiral. Senator Joan Huffman (R-Houston), who chairs the State Affairs Committee, is the bill's sponsor.

The Texas Retired Teachers Association (TRTA) published an update about CSHB 3976 this past Friday, May 12, providing members with answers to questions about projected program changes. You may read that update by clicking here.

The bill passed 8-0, and will now proceed to the Texas Senate floor, where it will be discussed. The Texas Retired Teachers Association (TRTA) will keep members apprised of the bill’s progress and possible dates for it to be heard on the floor.

New: Prescription Benefit Added to HB 3976 for Participants Under Age 65

Senator Huffman provided a committee substitute to the bill. The substitute adds a benefit that many retirees have asked for, $20 million in prescription drug coverage. Huffman’s plan would be to provide coverage for generic prescription maintenance drugs for under age 65 participants, listing several conditions for which certain drugs would be free of charge under the plan.

“I know you have all heard from the retired teachers (about prescription coverage),” Huffman said.

She stated that these would be fairly standard drugs, covering such conditions as diabetes and osteoporosis. TRS will likely provide a list of covered prescriptions after session. This benefit is a welcome addition to the bill. Prescriptions that do not meet the criteria set by TRS will still be subject to the deductible.

As our TRTA members may know, HB 3976 calls for a high-deductible plan for retirees under the age of 65 with a $3,000 deductible. No separate prescription plan has been included as part of the bill for those participants. Instead, prescriptions would be included in the $3,000 deductible. The age 65 or older retirees, who would be transitioned to the Medicare Advantage plan, have their own prescription plan.

Huffman also stated that she will advocate for the money to ensure that the CSHB 3976 plan structure is used, including adding the free prescription benefit. She will also advocate for enough money to use the House deductible of $3,000 (the Senate proposal deductible was $4,000), and the House proposed premiums (these premiums are about $50 cheaper than what was originally proposed). She also supports increasing the school district contribution.

“There will still be a shortfall in two years, this problem is not going away easily,” Huffman said. “We will continue to work towards making sure retired teachers have the health care they need.”

Senator Brian Birdwell (R-Granbury) questioned whether the Senate would fund the plan "with hard dollars" or by using the Economic Stabilization Fund (ESF), also known as the Rainy Day Fund. As our members may recall, the House approved using $500 million from the Rainy Day Fund to help pay for TRS-Care this coming biennium.

Senator Huffman, who serves on the conference committee that will decide the final version of the state budget, said again that she believed it is “not the majority will of the Senate to use the Rainy Day Fund.”

The Texas House has voted to use Rainy Day Fund to assist TRS-Care. The Senate’s budget refrains from using Rainy Day Funds. In order for retirees to receive the best possible benefits from CSHB 3976, the House and Senate will need to agree upon a budget that can sustain TRS-Care.

“We should have started fixing this last session, but instead we wrote a check,” Huffman said.

During the 84th Legislative Session in 2015, the Legislature provided $768 million in supplemental funds to cover the TRS-Care shortfall. Huffman said that this occurred because the state was flush with cash at the time, but that no structural changes were made to the program. “We don’t have extra money in GR (general revenue) lying around now like we did last session.”

Huffman also stated that CSHB 3976 has to pass, “because if it doesn’t the plan will go into a death spiral. This is a must (pass) bill, because if not, the retired teachers are in really bad shape.”

Huffman also said that she is committed to using the general revenue needed to get the plan she laid out today passed, and that she believes Senator Jane Nelson (R-Flower Mound), who chairs Senate Finance, is also committed. However, she reminded Senator Birdwell that she cannot speak for the other members on the budget conference committee.

Tim Lee, Executive Director of TRTA, testified in support of the bill, stressing his appreciation for the continued improvements and work on the bill. TRTA President, Nancy Byler, and Legislative Coordinator, Bill Barnes, were also in attendance for the meeting.

Lee said many retirees if asked, “wouldn’t even venture a guess” on where the funding comes from.

“Retirees are more concerned about what it will cost them,” Lee said.

He shared Huffman’s sentiment that the bill must pass, but that “we also need a budget that funds the benefit structure laid out.”

TRTA has worked all session to see the best resolution to this difficult issue. TRTA members deserve affordable health care, and the organization understands its members concerns about the current funding options.

Lee ended his testimony with a plea: “Please hear our outcry. We need as much money as possible in order for our retirees to be able to afford this program.”

Senator Craig Estes (R-Wichita Falls) stated his support for the bill, saying there are “no easy answers, but we have to come up with some answers. If we fail to act, it will lead to a catastrophic result.”

What Happens Next

CSHB 3976 has passed out of committee, and its next step is to be heard at by the full Senate. There still may be changes to the bill, as it can be amended on the floor.

While this bill is not a perfect solution, it is best option on the table, and it will prevent TRS-Care's collapse. Funding is what makes a difference. Over the next four days, TRTA will work with legislators to get the most money possible for TRS-Care. The more money provided by the Legislature, the better the plan will be for retirees.

Thank You

Thank you for your membership to TRTA. We are fighting ardently for your benefits every day at the Capitol. If you are not yet a TRTA member, please join here

This is TRTA's most challenging moment. The TRS-Care plan would be significantly worse without your advocacy! We can and will make a difference in affecting positive change for TRS-Care legislation.

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