TRTA Calls for Higher State Appropriation to Avert Drastic and Unaffordable Premium Increases for TRS-Care participants

Yesterday, July 10, the Texas House Appropriations and Pensions Committees met to review the TRS-Care retiree health insurance program, among other items.

The Texas Retired Teachers Association (TRTA) was invited to provide expert testimony as part of a panel of guests that included the Texas Association of School Administrators (TASA) and the Austin Independent School District (AISD), and many of our colleagues from the active school employee organizations. Tim Lee, Executive Director of TRTA, participated on the panel and spoke about the impact that the impending financial shortfall to the program could have on retirees across the state.

TRTA emphasized the importance of working with the Legislature to develop a solution that does not place the entire burden of resolving the nearly $1 billion shortfall on the backs of retirees with fixed incomes. Several TRTA members and TRS retirees were in attendance, many of whom were attending the TRTA District Presidents Leadership Training Conference. The hearing was a great opportunity for TRTA’s District Presidents to learn about grassroots advocacy and receive feedback from elected officials about their commitment to TRTA’s issues.

The Executive Director of the Teacher Retirement System of Texas (TRS), Brian Guthrie, provided an update on the program to a panel of legislators that included retiring Pensions Committee Chairman Representative Bill Callegari and Appropriations Chairman John Otto. Mr. Guthrie reminded the legislators that TRS-Care’s funding stream is based on active educator payroll and is not aligned with medical trends and cost drivers.

Mr. Guthrie also stated that Texas statute provides that the state will pay no more than 55% of the total cost of the program and that the state currently contributes approximately 23%. Retirees, who by law must pay for at least 30% of the total cost of TRS-Care, carry the heaviest burden at nearly 38%. Active educators are contributing about 15% of the total cost, while school districts add another 13%. Some federal dollars in the form of subsidies (primarily for Medicare Part D) account for 11%.

In January 2013, TRS started a Medicare Advantage program which helped to delay the looming financial crisis. Originally, the shortfall was expected to hit by the 2014-2015 biennium. This delayed the inevitable, and TRS plans to ask the Legislative Budget Board (LBB) for an exceptional budget item of $875 million in its appropriations request for the coming session. This is in addition to the state contribution of 1.0% of active educator payroll.

TRS also reviewed the nine options being considered in the TRS-Care Sustainability Study. TRTA reviewed the nine options in a series of Inside Line articles over the past couple of months. You may review the articles on our website at www.trta.org under Legislative Updates. Mr. Guthrie indicated that TRS plans to eliminate Option 9 from the study.

During Tim Lee’s testimony, he expressed TRTA’s belief that the current funding from the state for retiree health care is not adequate. In 2013, the state paid $241.6 million for about 190,000 retirees and surviving spouses into TRS-Care. This is equivalent to $106 per month per participant.

TRTA also expressed that TRS is doing a good job of managing TRS-Care. TRS always looks for ways to save money and still provide adequate health care coverage for TRS-Care participants. While TRTA will continue to work with TRS to reduce health care costs, the bottom line is that additional funding is needed!

TRTA knows that tough choices will have to be made. That being said, TRTA believes that a significant increase in state funding is needed to begin the process of saving TRS-Care. Reductions in health care benefits are not acceptable for a group of individuals who spent their lives educating our children and whose medical needs continue to increase.

TRTA wholeheartedly supports action by the Legislature to provide affordable and accessible health care benefits for all active and retired educators. TRTA will continue working with the Appropriations and Pensions Committees and the Legislature to make TRS-Care sustainable.

TRTA knows that many legislators want to help avert a major crisis with TRS-Care. We will work together to solve this problem, but it will require a tremendous effort by all TRS retirees. There is no way for us to predict the outcome, but doubling premiums or reducing benefits dramatically are not acceptable!

We need your help. If you are a TRTA member, you will soon receive the next issue of the The VOICE. We will feature a four-page advocacy guide along with step-by-step instructions on how you can get involved. Be ready to join our TRTA efforts, plan a meeting with a legislator, share this information with your fellow TRS retirees and work with our friends in the active school community.

There are 1.3 million Texans who are a part of TRS. We have the power. Let’s make sure we use it to ensure the integrity of our TRS benefits—you’ve earned it!

Thank You!

Thank you for being a member of TRTA. If you are not a member and would like to join, please contact our Membership Department at 1.800.880.1650. Remember, we need you!

Your $35 in annual dues enables us take a knowledgeable, expert team to the Capitol to defend your retirement benefits. For less than $3 per month, TRTA manages a statewide association focused on you, your retirement, and protecting and improving what you have earned. We truly appreciate every member and we value your support.
Contact us at info@trta.org with your questions, thoughts, or concerns.