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18 Jul
0

TRTA Attacked, Time to Set the Record Straight

TRTA Members Being Called to Action!
Recently, a blog post written by Empower Texans (a conservative think tank well known for its political activism) regarding the TRS-Care retiree health insurance funding crisis portrayed the fund’s shortfall as a battle between political factions, and misrepresented several key facts in the ongoing quest to adequately fund the program.
The blog accused Texas Retired Teachers Association (TRTA) of agreeing “with the big spenders,” and deciding that “state money to fund video game production and subsidize billion-dollar blockbuster movies took priority over healthcare for retired teachers.”
This organization’s blog post focused on the non-passage of several amendments presented in 2013 to defund other state programs, but they FAILED TO MENTION THE “KEY” PIECE OF LEGISLATION that was negotiated for months, which offered far more significant long-term financial benefits to TRS-Care—Senate Bill 1458. Senate Bill 1458 passed both houses of the Texas Legislature unanimously, without a single dissenting vote.
The TRS-Care funding crisis is not unexpected. It is a direct result of TRS-Care’s funding stream being based on active educator payroll instead of medical trends and cost drivers. This has been an issue for TRS-Care for many years, and this is not the first time that the Legislature has had to reassess the funding structure. In 2005, changes made to TRS-Care included the addition of contributions from school districts, for example.
The Texas Legislature made the pension fund a priority in 2013. During the 83rd Legislative Session, TRTA met with all elected officials, Republicans and Democrats, and all active educator groups to create Senate Bill 1458. As a result of our efforts and those of the legislators who helped us, the Teacher Retirement System of Texas (TRS) pension plan is the best in the state and one of the best funded in the nation. TRS is now actuarially sound and was able to provide the first permanent cost-of-living increase for 200,000 members since 2001. The system, which faced shortfall in the multi-billions, is now nearly $130 billion strong, and can pay for the pension benefits of all of its 1,300,000 participants.
TRS-Care was also impacted financially by Senate Bill 1458. The passage included the following changes to the program:
  • Requires a future retiree to meet the Rule of 80 with a minimum age 62 in order to participate in TRS-Care 2 or 3;
  • Any active member who retirees prior to age 62 will have access to TRS-Care 1 and will be able to join TRS-Care 2 or 3 at age 62; and
  • This TRS-Care provision grandfathers any current active member who meets the Rule of 70 (combination of years of service and age equal 70 or more) or who has at least 25 years of service as of September 1, 2014.
As TRS Executive Director Brian Guthrie testified last week during the joint hearing of the House Appropriations and Pensions Committees, those changes will impact the financial health of TRS-Care for the long-term.
In the short-term, TRTA needs legislative champions who are sincere about helping us address the impending $875 million shortfall that will hit TRS-Care in the 2016-17 biennium.
Just as the Texas Legislature prioritized the TRS pension fund in 2013, they must now prioritize the TRS-Care retiree health insurance program.
We are asking our legislators to:
  • Take a firm position on fully funding TRS-Care now and in the future;
  • Ensure that current TRS-Care participants have affordable, accessible health care throughout their retirement years;
  • Provide the funding plan necessary to ensure TRS-Care is accessible upon retirement to current active educators who pay in a portion of their salary to help fund the program; and
  • Reject any attempts by outside groups to hijack this issue and play politics with retired school employees’ health care.
As TRTA works with the Legislature, active educator groups and any organization that wants to help find the funding necessary for TRS-Care, we WILL 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!
TRTA is YOU!
TRTA is the ONLY group in Texas exclusively dedicated to protecting the retirement benefits of all current and future public education retirees in the state. For over 60 years, TRTA has been working to protect what our retirees have earned. Our charitable partner, the Texas Retired Teachers Foundation, has given thousands of dollars to help retirees in financial crises and thousands more to current public school teachers and future educators for classroom programs and scholarships.
TRTA has NO HIDDEN AGENDA and will work only for the best interests of our members and every retiree and pre-retiree in Texas. Anyone who believes in TRTA’s mission to promote and develop good public policy should stand up for us and REJECT THIS ATTACK on our 80,000 members. TRTA does not have a political action committee. TRTA does not back candidates for office financially, and TRTA does not “score” legislators on their votes!
Our ONLY interest is in creating the best outcome for all retirees and future retirees who have paid into both TRS and the TRS-Care program their entire careers and deserve to receive what they have earned.
TRTA is NOT an attack group. Our members are educated and dedicated public servants. As an organization, we support legislators and their efforts. Our members know that the way to achieve success through the legislative process is to find common ground. We meet in good faith to educate legislators on the issues, and offer real solutions to very challenging circumstances in an honest and ethical way.
Our public education RETIREES ARE NOT PAWNS in a political game. Resolving the TRS-Care funding crisis will not be done through tricky catchphrases and political spin. Our strength as an organization is not rhetoric, nor is it money. Our strength is our ability to represent our issues factually, and to create and support legislative action that is in the best interests of current and future retirees — as well as Texas taxpayers.
Making policy decisions that impact retired school employees is a matter of state business; but messing with retirees to score political points is more than bad form — it is detrimental to any public servant’s political career.
TRTA wants to work in good faith with ALL elected officials. We invite any and all Texas legislators to share their views on the TRS-Care crisis and we pledge to continue our efforts to provide factual data and real ideas for solving the TRS-Care funding issue.
Time to Take Action!
TRTA is 80,000 members strong. Our members dedicated their lives to Texas school children, and they believe in the legacy of Texas public education. Now, our members’ efforts to protect their own benefits are being attacked.
TRTA does not know why any elected official or office seeker would agree with a line of attack against TRTA and its members. What outcome can be achieved by attacking our retired educators?
TRTA believes that legislators of all political ideology can see past the rhetoric of this attack on our members and this association. Our members can help set the record straight and ensure legislators that we are ready, willing, and able to resolve the TRS-Care crisis!
Members, this is an immediate call to action. Let’s do what we always have done best: EDUCATE. This is your life’s work!
Now is the time to organize and get involved. Many elected officials are in their home districts and are open to hearing from their constituents about the work they will need to do next session.
Don’t wait to start advocating for yourself and your fellow retirees!Contact your local TRTA leadership and join a local unit and their efforts to meet with and talk to legislators.
You can also click here to send an email. We want our elected officials to know:
  • TRTA will work with them;
  • When we work together we SOLVE problems;
  • TRTA is a problem-solving group and our members expect us to find areas of common ground with all elected officials in the spirit of cooperation to protect and improve the benefits of all current and future TRS retirees;
  • TRTA represents the interests of public education retirees and those efforts have helped public education retirees for over 60 years!
Concluding Comments
This one blog post demonstrates that there are many outside interests that do not align with protecting retiree benefits. TRTA members must be vigilant. There are elections still to come. Your power is in your vote. Make sure the person you send to Austin knows you will not be bullied and that attacking the organization that you formed, support and believe in represents your interests!
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 have earned it!
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. You can also download the guide here.
The negative message in the attack blog is the kind of rhetoric that your elected official WILL hear before and during the 84th Legislative Session. Armed with the FACTS, TRTA will act to protect the interests of current and future education retirees. Are YOU going to take action?
We are ready to fight for TRS-Care. Our members are ready to PROTECT WHAT THEY HAVE EARNED — boots on the ground!
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! While this may sound like just a nice way to end an article, we hope that you can see by this attack on TRTA that we really do NEED you!
Contact us at info@trta.org with your questions, thoughts, or concerns.

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11 Jul
0

House Appropriations and Pensions Committees Meet to Discuss TRS-Care

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.

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02 Jul
0

TRTA Policy Discussion: TRS Care, Day 7, 8 and 9

Today, the Texas Retired Teachers Association (TRTA) continues its discussion about the Teacher Retirement System of Texas (TRS) sustainability study of the retiree health insurance program TRS-Care.

In our first Inside Line article about the TRS-Care study, we reviewed Option 1: Pre-funding the long-term liability. We discussed Option 2: Funding on a pay-as-you-go basis for the biennium. Option 3 covered funding for 10-year solvency. We reviewed Option 4: Retirees pay full cost for optional coverage and Option 5: Mandatory participation in the Medicare Advantage and Medicare Part D plans, as well as Option 6: Defined contribution—Establish a Health Reimbursement Account (HRA) for non-Medicare Retirees.

Today’s Inside Line will cover Options 7, 8 and 9.

Option 7: Modify Eligibility for TRS-Care 3 Standard Plan.

Option 7, as presented by TRS, would grandfather the current enrollees and allow new enrollees over age 65 who do not have Medicare Part A to participate in TRS-Care 3. Retirees under age 65 would be placed in a hybrid TRS-Care 2 and 3 plan.

It is important to note that during the 83rd Legislative Session in 2013, Senate Bill 1458 included some modifications in eligibility for TRS-Care.

The passage of Senate Bill 1458 included the following changes:

  • Requires a future retiree to meet the Rule of 80 with a minimum age 62 in order to participate in TRS-Care 2 or 3;
  • Any active member who retirees prior to age 62 will have access to TRS-Care 1 and will be able to join TRS-Care 2 or 3 at age 62; and
  • This TRS-Care provision grandfathers any current active member who meets the Rule of 70 (combination of years of service and age equal 70 or more) or who has at least 25 years of service as of September 1, 2014.

Option 7, like Option 6, has not been fully reviewed by TRS and is one that will be assessed throughout the summer as the sustainability study continues. The hybrid plan is one that TRTA would like to learn more about. The TRS Retiree Advisory Committee (RAC) did not rule out this option entirely, but had several questions as to how a hybrid TRS-Care 2 and 3 plan might come to fruition. If the plans were combined, in all likelihood, there would be increases premiums and deductibles for its participants.

Due to the fact that many changes were made to eligibility for TRS-Care just last session, TRTA believes that more stringent modifications for future participants would have a negative impact on active employees. TRTA worked closely with active educator groups last session to compromise on the eligibility requirements for TRS-Care.

The changes made last session effectively made it impossible for some future TRS-Care participants to retire with anything more than catastrophic coverage before the age of 62. Additional modifications, especially increased age modifications, could create a hardship for those employees.

The savings created by the changes made as a result of Senate Bill 1458 affect the program’s bottom line in the long-term, but had little financial impact in the near-term. Without stringent modifications that would affect active employees who are about to retire (the same people who were grandfathered from the changes through SB 1458), Option 7 does not provide a significant impact on the funding shortfall on its own.

Option 8: Steerage Plan Design for the Non-Medicare Population

Option 8 refers to a method for steering TRS-Care participants to the most cost-effective plan for them. Although this option is still in need of additional study, the general idea is that patients are referred to managed care procedures inside a contracted network of providers.

Steerage programs aim to motivate participants and their dependents to choose better health care providers. The challenge for employers and other payers is finding the right mix of health care services, communication and rewards to shift patients to health care providers that deliver higher value.

The Logic of Value-Based Network Design

  • Allow broad networks but identify providers that offer the greatest value.
  • Use differential cost sharing to steer patients to preferred providers.
  • Those with the lowest willingness to pay for “non-preferred” providers will switch.
  • The threat of switching may affect provider behavior in ways that are consistent with payer objectives.

 (Taken from: http://www.the-alliance.org/uploadedFiles/Events/2012_03Mar_Steerage_executive_summary.pdf)

Option 8 includes value-based plan design with reference-based pricing. For example, if a participant needs a knee replacement, the plan offers a certain amount for the procedure and the participant chooses the provider for the service. Option 8 also includes mandatory participation in a disease management program for participants with chronic conditions.

As TRS continues studying this option, we want to hear your feedback. Would a steerage plan design work for you? Why or why not? Please recall that this option refers to non-Medicare participants only.

TRTA is skeptical. Has the medical marketplace adopted a truly transparent billing system? We are also concerned because health care is often an immediate need. Like most items in life, some options are just better than others and not all providers are equal. These are complicated circumstances and we are not ready for our TRTA members to be the guinea pigs of experimental billing and care methodologies.

We doubt many lawmakers are interested in these type of steerage plans for themselves or their own families and employees, so we are not sure why they would work for our TRTA members. That being said, we certainly will continue to review all information provided by TRS and still need your feedback.

Option 9: Combine TRS-Care and TRS-ActiveCare

Option 9 suggests one of two possibilities: a. combining both Medicare and non-Medicare retirees with the TRS-ActiveCare insurance program for active school employees, or b. combining only the non-Medicare retirees with TRS-ActiveCare.

This option would spread the cost among a greater population of participants. Participation in TRS-ActiveCare has grown to over 477,000 employees and dependents. TRS-Care retiree participants and dependents equals 243,100.

Without additional funding, this approach would shift a significant amount of costs from the TRS-Care program to TRS-ActiveCare, and not provide any real savings.

Another major concern TRTA has with Option 9 is the critical condition of the TRS-ActiveCare program. According to the Texas Classroom Teachers Association (TCTA), “employees in TRS ActiveCare 2 pay 51% of their employee-only premium and 80% of a family plan.”

TCTA also notes that “ActiveCare employees have borne the burden of increasing health care costs since the program’s inception more than a decade ago.” The ActiveCare funding structure is different from TRS-Care. Funding shortfalls in ActiveCare simply are passed on to the participants, as the state has not changed the funding structure for years. ActiveCare premiums—which have been increasing for years—are becoming unaffordable. In fact, on June 6 of this year, the TRS Board voted to increase premiums for ActiveCare again. Read more here.

In addition to the premium hikes, benefits have been reduced. The fact is, though, that TRS is not to blame. They have done a great job managing a difficult situation. The Legislature is simply choosing other priorities over adequately funding the health care program. TRTA sees this as the issue for BOTH our retiree health care program and the active school employee situation.

At this time, TRTA does not support combining the plans until ActiveCare premiums are stabilized for current participants.

The TRS-Care Study is Ongoing

As a reminder, the information we are sharing in this special TRTA series on TRS options for sustaining our retiree health care program are part of a study. These options are NOT part of any absolute plan that is being implemented.

Could these options be implemented? Yes. Will TRS make these decisions? Not likely. Will this TRS study guide a conversation on how to deal with these important issues? Yes. Will the Legislature be involved in this TRS-Care crisis before any option or plan is implemented? Yes!

Does TRTA and its membership have an opportunity to lead on this issue and make the outcome better? Absolutely!!!

Ask yourself this one question and feel free to pose it to any other TRS retiree or future retiree you may know: Will the Legislature’s response be more favorable or less favorable to the TRS-Care crisis if we are not organized and TRTA does not play a part? We know the answer is that TRTA members MAKE A DIFFERENCE!

The Next Phase of this Discussion

TRTA is scheduled to provide expert public testimony about the TRS-Care funding shortfall on July 10, 2014 to a joint meeting of the House Appropriations and Pensions Committees. We will assert the many positive benefits of the TRS-Care plan, but focus on the lack of funding as the central problem in the TRS-Care crisis.

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.

Share these articles with every retiree you know, as well as with active school personnel! Your input is important. Your membership and support are crucial. Thank you for all your help and support.

Contact us at info@trta.org with your questions, thoughts, or concerns.

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