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08 Jun
0

TRS Meeting Underway: Pension Benefit Study, TRS-Care Among Many Issues Being Discussed

Update on TRS-Care Medicare Advantage Option
Many TRTA members expressed concern and shared questions with us regarding the potential changes to the TRS-Care health insurance program. Betsey Jones, Director of Health Care Policy for TRS, was kind enough to review a list of those questions compiled by TRTA and respond to them.
What are the changes being discussed?
  • Medicare Advantage—A health insurance product that takes the place of Medicare and TRS-Care. This plan, while taking the place of these two options, does not remove an individual from the TRS health care program. A TRS-Care Medicare Advantage option is different in benefit coverage and doctor networks than what may be available in the individual market.
  • Employer Group Waiver Program—A prescription drug option that moves a retiree into the Medicare D Prescription Drug plan. This plan has been enhanced significantly from the time of its introduction almost 5 years ago. The overall benefit and cost savings is far more advantageous to the plan member (a TRS-Care participant) and plan sponsor (TRS-Care).
Are these plans linked to the Affordable Care Act (ACA)?
  • The Medicare Advantage Plan is NOT linked to the Affordable Care Act.
  • The Employer Group Waiver Program (EGWP), the prescription drug component, is linked to the Affordable Care Act. The original Medicare D provided a “donut hole” in the prescription drug coverage where participants picked up more of the overall cost. The Affordable Care Act has a provision that reduces the cost of prescription drugs in the donut hole by 50%. This change allows TRS to save millions of dollars by using this plan in lieu of receiving a reimbursement from the federal government, as has been the case for the last few years.
  • If the Affordable Care Act is declared unconstitutional, TRS will reevaluate their decision on EGWP and adjust their decisions accordingly.
What did the TRS Board recommend for the Medicare Advantage Plan?
  • TRS-Care will incorporate a Medicare Advantage Plan as a choice for retirees eligible for this option.
  • The plan provider will be Aetna. Aetna was picked for their large network, current relationship with TRS-Care, strong pricing, and ability to communicate with and advocate for TRS retirees in their Advantage plan.
  • As an additional incentive for retirees participating in the Medicare Advantage plan, retirees will receive a $15 per month reduction in their premiums.
  • In addition, Medicare Advantage deductibles will be reduced by 50%.
    • If you are in TRS-Care 3 and choose Medicare Advantage, your deductible will be reduced from $300 to $150.
    • If you are in TRS-Care 2 and choose Medicare Advantage, your deductible will be reduced from $1,000 to $500.
  • A retiree participating in the Medicare D plan will have a $5 reduction in copays for generic and preferred brand drugs.
  • The Medicare D plan will also:
    • Eliminate the requirement that participants pay the difference in cost between brand and generic drugs when a generic is available;
    • Offer premium and copay assistance for certain low income individuals;
    • Improve benefits for participants faced with catastrophic pharmacy costs.
  • TRS-Care participants eligible for the Medicare Advantage plan and the Medicare D plan will be automatically enrolled. Members need to know that plan participation is voluntary. Though you will be auto-enrolled, you can withdraw from Medicare Advantage, Medicare D, or both. Those who withdraw will revert back to the plan they are already using.
  • The more people that participate in the plans, the more that TRS-Care will save. The incorporation of the Medicare Advantage and Medicare D plans could save TRS-Care as much as $385 million or more. This will help extend the solvency of the TRS-Care plan to at least 2016.
  • The Medicare Advantage Plan is designed to provide coverage as good, and in many cases, better than the current TRS-Care plans 2 or 3.
  • TRS will offer direct member informational sessions through the state’s regional service center network, establish a toll-free information line and provide written materials explaining TRS-Care participant options.
 
TRTA Executive Director Tim Lee addressed the TRS Board of Trustees at today’s meeting regarding the TRS-Care Medicare Advantage proposal. “This plan design option is one that offers many benefits to both the member and the TRS-Care plan. Clearly, the success of these options is based on members understanding them, allowing members to receive care from the health care providers of their choice, and the plan not acting as a ‘gatekeeper’ to those services.
Mr. Lee presented a list of concerns that must be addressed and satisfied for retirees to consider this option one they can be comfortable participating in. This list of concerns was a culmination of questions expressed by TRTA members.
In response, the TRS Board invited the Aetna representative (the selected provider) to answer many questions at today’s meeting. Some of those answers included:
  • The Medicare Advantage product is designed to be as good or better than current options;
  • The plan is NOT the same product as may be available in the private market–this is a product designed for TRS-Care participants;
  • Aetna will not act as a “gatekeeper.” Aetna describes this plan as an “open access program” that allows you to utilize their health advocate network as much or as little as you wish;
  • There are no referrals needed for service; Aetna and TRS believe that a referral system with this plan design is not helpful as many TRS members may need to see more than one doctor every month;
  • There may be some instances when a doctor may take Medicare and not Medicare Advantage. TRS expects Aetna to work with the provider and reach out to the provider community to resolve any issues to the fullest extent possible. Those TRS-Care participants who feel it is more beneficial to remain in their current TRS-Care 2 or TRS-Care 3 plan may choose to do so;
  • For those interested in trying the Medicare Advantage plan, but concerned you will have difficulty switching back to TRS-Care if you decide to opt out, TRS explains that you will go back into your original plan (TRS-Care 2 or TRS-Care 3);
  • If you are not eligible for Medicare A and B, you will not be auto-enrolled in this plan and you will remain on TRS-Care 2 or 3 (depending on your coverage);
  • Non-Medicare Advantage participants will not see premium reductions or benefit enhancements that are available in the Advantage plan, but premiums and benefits for TRS-Care 2 and 3 are unchanged for the coming year.
TRTA believes that the Teacher Retirement System staff and Board of Trustees are providing the best Medicare Advantage plan that is possible for our TRS-Care participants. This option provides a richer benefit, a provider network that is already used for the current TRS-Care plan, lower premium cost and deductibles, assistance through professional health care advocates, plan savings for the TRS-Care plan, and the ability to opt out of the plan without penalty even after the plan is launched in January 2013. TRS-Care will also extend the plan year through December 31, so that retiree deductibles and out of pocket maximum thresholds will not reset at the start of next year.
Many people will still have many questions about plan coverage, doctor choice, and out-of-pocket costs. TRS will launch a broad communications program to answer your questions. TRTA will continue to follow this issue and provide regular information.
The bottom line is that this Medicare Advantage proposal may be very beneficial for those who qualify for it. The proof, though, will be in Aetna educating members, answering questions, and working with doctors and medical providers to ensure their participation in the plan.
Thank you for all your questions about this issue. We are working hard to get the answers you need. A copy of Tim Lee’s letter to the TRS Board of Trustees will be posted to the TRTA web site for your review. Please feel free to send more questions and feedback, and we will address these issues with TRS.
We appreciate your membership in the Texas Retired Teachers Association. Your membership is what helps this organization represent your interests’ with TRS, the Texas Legislature, and to help protect and improve your retirement benefits. If you are not a member and would like to know more about joining TRTA, please contact our office at 1.800.880.1650.
TRTA will provide an additional update on other TRS business issues in the coming days.

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02 Jun
0

TRS Retiree Advisory Committee Meeting Provides Background on How Changes May Improve Both Benefits and TRS-Care Funding

The TRS Retiree Advisory Committee (a group of active and retired TRS members that advises TRS on benefits issues and presents concerns) met to discuss changes and potential options for modifying the TRS-Care health insurance program.

Bill Hickman, a TRS consultant from Gabriel, Roeder, Smith & Company, reported that projections show the TRS-Care program will be solvent through FY 2014. As you know, concerns were raised during the last legislative session about the sustainability of the program, which received less funding from the state for the current biennium than in previous years.

Though the date at which TRS-Care was expected to run out of funds has improved, TRS has been tasked with finding options that will extend the program for a longer period of time. At today’s meeting, the news about maintaining revenues and managing costs was good; but if the plan begins to lose money, “it loses it fast,” potentially creating major funding problems very quickly for the TRS-Care program.

Maintaining the plan through FY 2014 is great news; however, this issue will dominate legislative discussions next session. FY 2015 and beyond may be negative growth years, meaning the plan is likely to run out of money quickly after next session if nothing is done to improve the situation.

TRTA members were instrumental in working with the Texas Legislature last session to protect retiree premiums. At the time, the Legislature indicated its intent that health care premiums for retirees not be raised by the TRS Board of Trustees during this biennium.

Positive changes for TRS-Care include a new pharmaceutical benefits manager (PBM). TRS-Care participants will be transitioned from Caremark to Medco, effective September 1, 2012. The TRS Board of Trustees selected Medco because of a significant cost savings to the program. An important note about Medco: Medco is now owned by Express Scripts International (ESI). Materials about your pharmacy benefit change will mention transitioning from Caremark to MedcoESI. Eventually, the Medco name will be dropped altogether, and will be referred to only as Express Scripts or ESI.

New Health Care Rules Could Save BIG Dollars

The TRS Board of Trustees has discussed and will continue to talk about TRS-Care plan savings that are made available through the Affordable Care Act. One of those changes is a program that we have already reported on called the Employer Group Waiver Program (EGWP, pronounced “Egg Whip”).

This option allows anyone who is Medicare A or B eligible and who has been on TRS-Care 2 or 3 to receive better prescription drug benefits than currently provided by TRS-Care. In addition, it saves TRS-Care hundreds of millions of dollars.

Betsey Jones, Director of Health Care Policy for TRS, explained to the committee that this plan would provide a better benefit for retirees. Examples of these improved benefits include:

·         No penalty for using brand name drugs over generics;

·         Low income premium assistance; and

·         Reduced premiums for participants who experience catastrophic levels of coverage. 

The rules governing these changes will allow a person to opt out of the program; however, the more people that opt out, the less beneficial this is for the TRS-Care program financially. TRS knows that this program could potentially save the plan hundreds of millions of dollars and provide a better benefit to retirees. TRS also knows that many people have a low propensity for change, so they may develop additional incentives for staying in the program.

It is also good news that Medco will be the TRS-Care Medicare Part D provider. If approved, this change would become effective next January.

Another change that will be discussed in more detail next week is a Medicare Advantage plan. This plan would take the place of traditional Medicare Part A and B plans. The Medicare Advantage plan would be available to TRS-Care participants that qualify for both Medicare A and B. Like the prescription drug benefit change already discussed, this Medicare Advantage plan would provide the same or better coverage and would save TRS-Care enough money that the TRS Board may consider additional incentives for retirees.

There are many TRS-Care participants who are over age 65, but may not qualify for both parts of Medicare (these individuals may not have changed jobs in their school district after 1986, or both spouses are educators they did not pay the Medicare tax after 1986). These people would not qualify for the Medicare Advantage plan that is being considered by TRS. TRTA is working to get an answer to the question about their continued health care coverage and cost. Since these issues are still new and developing, we have been told that these people will stay on their current plan at the same rate, but they would not be eligible to receive some of the additional benefits that are part of the Medicare Advantage plans. We are still researching this answer, but it will be a major factor in our discussions with the TRS Board of Trustees.

Several Medicare Advantage vendors are being considered, but TRS reports that all vendors provide additional services above and beyond Medicare A and B. Upon selection of a vendor, this plan would become effective in January 2013.

The board will consider this issue at next week’s meeting on June 7 and 8 (link to meeting agenda: http://www.trs.state.tx.us/about/documents/board_agenda_jun12.pdf). If you would like to watch this meeting live online, click on the following link (June 7: http://trs.mediasite.com/mediasite/Viewer/?peid=d749d3be9fd9448b82eea83c7b85b9f01d and June 8: http://trs.mediasite.com/mediasite/Viewer/?peid=170cb0c841414722810aa66d99daede21d).

TRS is still studying changes to non-Medicare eligible TRS-Care participants (people who are not yet age-eligible for Medicare coverage). Younger retirees not participating in Medicare due to age factor at a higher cost than Medicare eligible participants. This is because Medicare becomes the primary insurance for the retiree, with TRS-Care being secondary.

TRS staff said today that every consideration, from changing the eligibility age to pre-funding the plan, is being studied. At this time, no options have been selected. Study results are due to the Texas Legislature in September. Betsey Jones of TRS pointed out that there are only three methods of improving the program: 1. Adjusting eligibility and benefits; 2. Raising retiree premiums; and 3. Increased funding from other sources (includes the state, active personnel, etc.).

As you know, TRTA is against raising retiree premiums or accepting benefit changes that simply cost-shift the burden onto retirees. We will continue to push for additional funding from the state as a means to help sustain the TRS-Care program.

Although many of the changes that were discussed today are positive, one major challenge is communicating these changes to the retiree population. It is important that our members understand what is taking place.  We at TRTA will answer your questions about changes to the TRS-Care health insurance program to the best of our ability. As the summer progresses and TRS continues its legislative study, we will provide more detailed information to you through The Inside Line and The VOICE.

It is also important to note that these changes will be discussed and voted on by the TRS Board of Trustees. This provides TRTA more time to ask questions, study the options, and learn more about how changes may protect your health care benefit or provide cost savings to you.

Also, these changes are dependent upon the results of the Supreme Court case over the Affordable Care Act (ACA). These options may only be beneficial if the ACA remains intact. That case is expected to be resolved this month (June 2012).

The TRS staff and Board and TRTA are all working to keep your TRS-Care program viable in a way that provides a health care benefit that is as good or better at the same or lower cost to you. These are significant challenges, but there is good progress being made. June is an important month to participate in this process.

This is a confusing topic with questions that must be asked and issues that need to be resolved. While we are not ready to say that these plans should be accepted, we do think the work being done is very promising. Many things can still happen that would change the current considerations, so please do not think this issue is solved or that these proposals are ready to be implemented. We still have a long way to go! Next week’s TRS Board of Trustees meeting is vital to knowing in what direction we are heading.

You are our number one priority. TRTA takes its role as your voice and advocate very seriously. We want to know that our members and all TRS retirees and TRS-Care participants will be better off if these plans are implemented. Please feel free to email us your questions, concerns, and suggestions.

Thank You

We appreciate your membership in TRTA. If you are not a member and would like more information about joining, please contact our office at 1.800.880.1650. Thank you for all you do to support TRTA!

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01 Jun
0

Primaries are Over, but the Need to Educate is More Important than Ever!

Now that the Texas primaries are behind us, many people think it is time for a summer break and that we can resume political conversations in the fall. However, TRTA members know the value of utilizing the months before the general election to educate candidates about our issues!

The lobby to eliminate defined benefit pension plans is growing every day. The war may seem to be occurring only in states where legislatures have inadequately funded their pension plans; but there are numerous groups here in Texas that want to see your TRS plan changed.

Some of those groups, such as the Texas Public Policy Foundation and the Laura and John Arnold Foundation, are working daily to influence legislators to transition TRS from a defined benefit plan to a defined contribution plan. TRTA is opposed to any change to the TRS defined benefit plan design. We will oppose any effort to eliminate these important benefits for future educators.

Remember, even though some may believe that these changes will only impact “future” retirees, a so-called “transition” would impact every TRS member, active or retired. While decision-makers may believe current retiree benefits are not the target, any change to TRS that reduces funding levels puts the fiscal stability of the TRS plan in jeopardy.

Preservation of the TRS defined benefit plan is not TRTA’s only issue. We MUST do all in our power to protect the TRS-Care health insurance program. Funding for TRS-Care was reduced last session.

The good news is that premium levels will not increase during the current biennium. This marked the 4th session in a row that TRTA was able to keep premiums from increasing! TRTA has worked with the Legislature to ensure premium costs stayed the same as a means of helping retirees who have not had a pension increase since 2001.

Now, TRS-Care is running out of reserve dollars to maintain benefits and premium costs. The Legislature was informed last session that the “temporary” cuts to TRS-Care would cause immediate funding challenges. TRS officials are working on many proposals to preserve benefits for TRS-Care participants.

Today, TRTA will attend a meeting of the TRS-Care Advisory Council. This group is chaired by long-time TRTA member and friend, Sue Passmore. TRTA will review these proposals and send you an update after the meeting.

The TRS Board of Trustees will meet next week to review proposals discussed at today’s hearing. We will address the TRS Board about these proposals. TRTA will not support any premium increases or benefit reductions for TRS-Care participants. We are ready to work with TRS on any plan that can reduce costs and maintain this vital health insurance benefit. The TRS Board, however, can only do so much. The Texas Legislature must be ready to fund this health care program appropriately.

TRTA’s Message to Candidates for Office

This summer, we know you will be engaged with your legislators and those seeking election in the fall. As you meet with your leaders, please share these TRTA Legislative Priorities.

  1. Preserve the TRS-Care health insurance program without increasing premiums or making drastic benefit reductions for plan participants. Provide any supplemental budget appropriations that are needed to keep this program funded and intact.
  2. Defend the TRS Defined Benefit Pension Plan—Attacks levied against public pension plans are growing to a fever pitch, but no other plan design can provide the same level of benefit at a lower cost to the participant or the taxpayer.
  3. Pension Increase—TRS retirees have had no permanent increase in their pension benefits since 2001! Over the past 12 years, the costs of goods and services have increased dramatically. The price of gasoline alone has risen 247%! Retirees need an increase in their benefits or should receive some form of supplemental payment.
  4. Pension Funding—TRS is a well-funded, well-managed pension trust fund. The state’s contribution level was cut last session. The Texas Legislature must restore and increase funding to keep this plan strong.
  5. Allow direct election of TRS Trustees—TRTA is calling on the Legislature and Governor to pass legislation that allows for member trustees on the TRS Board to be elected directly by their constituent representatives. While there are elections for these positions today, the Governor still has final choice of the top three vote-getters in a member election. Why should the Governor have final appointment of members to the TRS Board who are duly elected by their member representatives?

These are the top five legislative priorities identified by TRTA members. TRTA works on MANY other issues during the legislative session. TRTA is an expert on pension policy and our members are very involved in the legislative and political process. While TRTA does not endorse candidates, our members VOTE in high percentages in all elections. We watch, listen, talk, educate and vote!

If you want to know more about the issues listed above, or want to help protect and improve benefits for public education retirees, please contact TRTA at 1.800.880.1650.

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