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07 Apr 2017
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Texas House Passes Budget Bill, Provides An Additional $500 Million For TRS-Care

The Texas House of Representatives passed its budget this morning. The budget includes the statutory contribution to TRS-Care as well as $500 million coming out of the Economic Stabilization Fund, also known as the Rainy Day Fund. The statutory state contribution for TRS-Care is 1 percent of active educator payroll.

Representatives debated the bill early into the morning, as it received more than 400 amendments on various issues that did not regard TRS-Care. The bill passed by a vote of 132-16.

The fight for health care funding is not over! The House’s commitment to retired teachers is to increase state-based funding for TRS-Care and add the $500 million, which passed this morning. A conference committee will negotiate will the final budget before it can be voted on by both chambers.

TRTA would like to thank its members for all the emails and phone calls sent to House members. This vote was critical in keeping TRS-Care affordable. TRTA would like to see the Legislature use this funding to reduce the impact of SB 788, which would create a $4,000 deductible plan for under-65 retirees, and would move all Medicare eligible retirees into Medicare Advantage. SB 788’s proposed changes simply are not affordable for many of our members.

TRTA has heard our members loud and clear. Working together, we will continue to send a strong, unified message to our elected leaders.

No changes were made to the TRS pension fund. House members voted to maintain the state’s contribution of 6.8 percent of active educator payroll to the TRS pension fund. This amount is required by the statute passed in 2013, SB 1458, and it ensures the actuarially soundness target for the TRS fund.

Stay tuned to the Inside Line, as SB 788 will go up for a vote as early as next week.

Thank You

Thank you for your steadfast dedication to retirees all across Texas and 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. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care here.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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05 Apr 2017
0

MEMBER ACTION ALERT – House Voting Thursday On TRS-Care Funding!

The Texas House of Representatives is set to take the most important vote of the legislative session regarding TRS-Care!

Click here to send an email to your representative encouraging them to fund TRS-Care!

On Thursday, April 6, 2017, the Texas House is scheduled to debate and vote on Senate Bill 1, the appropriations bill for the 85th Legislative Session. This bill will set the state budget and expenditures for the 2018-19 biennium. More than 400 amendments have been filed to the budget, and we can expect a long and arduous debate!

This budget vote is significant for several reasons:

  • The house budget contains at least $500 million in state appropriations for TRS-Care, which is almost $200 million more than the amount approved by the Senate;
  • These additional dollars may be used to lower the proposed $4,000 deductible for TRS-Care participants under the age of 65 and/or to extend the life of TRS-Care;
  • TRS-Care’s funding is contingent upon a two-thirds vote from the House as opposed to a majority vote (100 votes are needed instead of 76);
  • This is because the money must be appropriated from the Economic Stabilization Fund (also known as the Rainy Day Fund), and the vote is considered politically risky for some legislators.
  • Your representative’s vote will be CRITICAL in passing this funding bill.

Take Action Today!

Now is the time for our statewide team of dedicated education retirees to send a positive message to our partners in the Texas House, letting them know that we support their vote to use the Rainy Day Fund to “Keep TRS-Care Affordable!”

Over the next two days, TRTA is asking that you do the following:

  1. Email your state representative today by clicking here.
  2. CALL your state representative today (April 5) and tomorrow (April 6), and use the talking points below to help you. Be sure to use our toll-free legislative hotline 1-888-674-3788.
  3. Forward this email to your friends and colleagues, and share it via social media to help us spread the word that now is the time to take action to “Keep TRS-Care Affordable!”

Sample Phone Script

Use the message below to guide you when communicating with your State Representative.

“Hello, my name is _______. I am a retired Texas educator, a member of TRTA, and I live in your district.

Thank you for being a public servant in our state and our community. As a fellow public servant who relies on my monthly TRS annuity to pay my bills, I support your vote to use the Rainy Day Fund to help retired educators keep our health care program affordable.

We hope you will help us by using any funding for TRS-Care to reduce the proposed $4,000 deductible for retirees under the age of 65 and to extend the program’s life for the future.

Retirees are willing to do our part to pay for TRS-Care! We appreciate your vote to use the Rainy Day Fund to keep TRS-Care affordable for the 260,000 retirees who rely on the plan to keep us and our families healthy.”

Thank You!

It is critical that all members of TRTA lift their unified voice to maximize support for additional funding for TRS-Care! Help us spread the word that now is the time to take action!

Thank you for your steadfast dedication to retirees all across Texas and 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. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care here.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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04 Apr 2017
0

Senate State Affairs Discusses TRS-Care Bill

The Senate State Affairs Committee discussed a proposal today to make sweeping changes to TRS-Care, the state-run retiree health insurance program. Senate Bill 788 would eliminate TRS-Care 1, 2 and 3. The bill would require a high-deductible plan for participants under the age of 65 and a Medicare Advantage plan for all Medicare eligible participants. The Medicare Advantage plan would maintain a Medicare Part D Plan for prescription drug benefits.

Under SB 788, all Medicare eligible retirees will be moved into a plan with an estimated $146 per month premium. This includes retirees who aren’t Medicare Part A Plan eligible.

The bill also includes a tenet to ensure that Medicare eligible plan participants have sufficient access to health care providers and prompts TRS to develop a policy to facilitate provider access around the state, particularly in rural areas.

Senate Affairs Chairman Joan Huffman (R-Houston) authored SB 788.

For the high-deductible plan covering participants who are under 65, premiums would gradually increase over the course of four years, beginning in 2018. See an example of proposed premiums for the HD plan below.

  • Calendar Year 2018: Retiree only – $250/month, or $3,000 annually
  • Calendar Year 2019: Retiree only – $310/month, or $3,720 annually
  • Calendar Year 2020: Retiree only – $370/month, or $4,440 annually
  • Calendar Year 2021: Retiree only – $430/month, or $5,160 annually

* These are illustrative premiums; actual premiums will depend on funding and plan experience.

The proposed deductible for this plan is $4,000 for an individual. Prescription medication is also subject to the deductible, as there is no prescription drug coverage with this proposal. After the retiree has paid the first $4,000 in medical and prescription costs, the plan then pays 80 percent of in-network claims and drug costs, and the retiree will continue to pay 20 percent of those costs until they have hit their out-of-pocket maximum of $7,150.

The bill proposes to have no premiums for disability retirees who are not yet Medicare eligible for the first four years of the plan.

SB 788 includes a structural funding change, which would increase the state’s contribution from 1 percent of active teacher payroll to 1.25 percent, resulting in a permanent funding increase from the state. This would be about $170 million more in state funding.

In total, the Senate is proposing approximately $311 million in increased funding for TRS-Care. The remainder of the $1 billion budget shortfall will be paid for by retirees through premium increases and plan design changes.

Senator Huffman said that TRS-Care has experienced “dozens of design changes over the years,” noting that this is not the first time the plan has faced a shortfall. The Legislature covered a shortfall in 2015 in the amount of $768 million. Huffman said that there was “a better economic climate” during the 84th legislative session in 2015, but also stressed that despite the supplemental funding, no permanent solutions were made at the time to address the rising costs of health care.

“This solution is viable, but it is not perfect,” Huffman said. She emphasized that there are no easy answers given the state’s budgetary constraints. She also said if nothing is passed, the TRS board will have limited flexibility to address shortfall, and the shortfall would then be fully borne by retirees. The result would be a drastic increase in premiums, co-pays and deductibles.

Huffman also acknowledged that retirees are a vulnerable group who do not have rich pensions and live on fixed incomes. Senator Jane Nelson (R-Flower Mound) asked what happens if the state does nothing to address TRS-Care this session, and Huffman answered “the plan will collapse.”

Huffman also said SB 788 makes a substantial difference, but its passage does not mean that there will not be plan shortfalls in the future. A plan that would have prevented any future shortfalls “would be too draconian,” Huffman said.

The committee heard from several invited witnesses, including TRTA Executive Director Tim Lee. Lee thanked Senator Huffman for her leadership in this ongoing, difficult discussion. “TRTA believes the state needs to triple its contribution to TRS, or this program will not survive,” Lee said. Commenting that this may not be the session that such measures may pass, Lee suggested that prefunding the TRS-Care fund with an additional appropriation from the state Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, may be a way to help make needed changes to the TRS-Care program, but also minimize the cost burden on retirees.

Lee said many retirees plan on having a modest income during retirement, but the ever-increasing cost of health care needs to be addressed.

Lee also said that retirees “know that if we want to keep TRS-Care alive, everybody is going to have to put more money into it.” He stressed that though there are fewer dollars to go around and it is a harder conversation to have, retirees hope that the state will be able to increase their contribution by more than the proposed .25 percent.

Lee said an affordable health care plan is a requirement for retirees, and that for many retirees, a $4,000 deductible is not feasible.

The current TRS-Care system does not allow retirees to return to the program once they have opted out. Lee suggested that this statute change if SB 788 were to pass. He recommended that retirees should be allowed to return once they became Medicare eligible.

TRTA is concerned that SB 788 doesn’t do enough to address retirees’ financial needs, but our position on the bill remains neutral as negations continue. Without this bill or similar legislation, TRS-Care will not survive. TRTA is working to secure more funding through the budget process. Without more money, TRS-Care’s direction will either bankrupt retirees or end the plan altogether.

The Texas House’s TRS-Care Proposal

The Texas House’s budget bill proposes to provide additional state funding for TRS-Care. The House’s funding would come from two sources: the Economic Stabilization Fund (ESF) and general appropriations. The proposed budget includes $500 million from the ESF to help fill the $1 billion TRS-Care budget shortfall, as well as raising the state’s contribution into TRS-Care from 1 percent of active educator payroll to 1.25 percent.

It is very likely that the House will debate whether to pass its budget this week. Now is the critical time to call your legislators and tell them that you support the House’s budget. Use the toll free legislator hotline 1-888-674-3788 to let your representatives know you support their efforts to keep TRS-Care affordable!

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. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care here.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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