19 Apr

Texas House Appropriations Committee Discusses Funding Plan For TRS-Care

The Texas House Appropriations Committee met Monday, April 17 to discuss House Bill 3976, the TRS-Care bill filed by Chairman Trent Ashby. HB 3976 proposes to make significant plan design changes to TRS-Care, and increases state and school district funding to the retiree health care program.

The bill was voted out of committee yesterday. It will soon head to the Texas House floor for a vote. As progress is made on addressing the huge financial issues burdening TRS-Care, it is vital that our members read and share this information with fellow retirees and any active educators they know!

If Nothing Is Done

During Monday’s hearing, Texas Retired Teachers Association (TRTA) Executive Director Tim Lee testified, “TRS-Care is on a collision course for disaster if no action is taken this session.”

Currently, TRS-Care offers a no-cost option known as TRS-Care 1. Because the predicted shortfall is so high (more than $1 billion), TRS speculates that without legislative action the plan will have unaffordable premiums.

“If this plan (TRS-Care) does not have a solution, our retiree premiums will skyrocket,” said Lee.

The premiums are expected to exceed $1,200 to $1,500 per month, and many retirees would rush to the available free option, cutting program’s revenue drastically. This forced shift and loss of revenue would send TRS-Care into a death spiral, and the program would likely die in the coming biennium.

TRS-Care’s Central Problem: The Funding

The issues with TRS-Care emanate from the total funding made available for the program. Both versions of the budget started with no additional funding to mitigate the huge premium increase for retirees. TRTA has worked diligently with House and Senate leaders to secure additional funding. The results of that effort are evident, as the House proposal contains $633 million for TRS-Care.

The Texas House is proposing a much higher level of appropriation for TRS-Care than the Senate, providing supplemental funding for the program at twice the rate of the Senate.

Total Texas House increase in TRS-Care funding for FY 18/19 $633 million
Total Texas Senate increase in TRS-Care funding for FY 18/19 $311 million

The Legislation: HB 3976 vs. SB 788

At its core, HB 3976 is not that dissimilar from SB 788. However, when you compare the House appropriations to TRS-Care to the appropriations suggested by the Senate, there are significant differences in the real out-of-pocket-costs retirees will pay under the new healthcare plan design.

Pre-65 retirees: Retired educators who are not Medicare age-eligible (under the age of 65) would see their current plan options (TRS-Care 1, 2 and 3) transition to a single option, the “high deductible” (HD).

All figures stated are projections based on the ever-changing budget shortfall. The Texas House is proposing a $3,000 deductible for pre-65 retiree individual coverage. Comparatively, the Texas Senate proposed a $4,000 deductible. Both the House and the Senate propose a coinsurance coverage level for all. The deductible includes all medical and prescription drug costs. Once the deductible is reached, the plan will cover 80 percent of prescription drug costs. The plan has a $7,150 Maximum-Out-Of-Pocket (MOOP) cost for individuals. Once the MOOP is reached, all prescription drug costs will be covered.

The House bill adds an open enrollment provision for retirees when they become 65. This is an important provision as some pre-65 retirees enrolled in TRS-Care may leave the program and want to re-enroll when they become Medicare eligible.

Projected Pre-65 Retiree Premium Costs (Retiree only):

Year House Premium Plan Senate Premium Plan
2018 $200/month $250/month
2019 $250/month $310/month
2020 $310/month $370/month
2021 $370/month $430/month

Pre-65 Disability Retirees: The bill also provides a zero-cost premium for TRS-Care pre-65 members who retired with a disability annuity. Please note, the zero-cost option would only apply to the disabled retiree, not to the spouse and the provision will end in FY 2021.

Retirees age 65 and over: All retirees 65 and older will be transitioned to Medicare Advantage. The premiums would be approximately $146 per month.

Projected 65 and Over Retiree Premium Costs for Medicare Advantage (Retiree only):

Plan Year 2018-2021: $146/month

The Bottom Line

TRS-Care solutions are complex and costly. Retirees and state elected officials do not control the cost of healthcare. But, we all have to figure out how to pay for it.

While TRTA is working to keep TRS-Care as intact as possible, the state budget demands are vast and revenue in this budget cycle is extremely tight. Most items in state government are getting cut, and TRS-Care is one of the very few exceptions that may receive additional revenue.

The situation is dire, and whatever the Legislature decides, all solutions lead to TRS-Care participants paying more for health care coverage.

TRTA supports HB 3976. The bill is part of a broader budget plan that the Texas House has put forward to address the TRS-Care shortfall. It utilizes state revenue, as well as money from the Rainy Day Fund to lower retirees’ total out-of-pocket costs.

TRTA did not oppose SB 788. We were neutral on that bill as we hoped the Senate would continue to refine their plan and lower the out-of-pocket costs for retirees. For the time being, SB 788 has been removed from the Senate calendar and its fate is unknown. Eventually, the Senate will have to take action on a TRS-Care solution and take a stand on what they will support when it comes to your health care costs.

TRTA wants the best deal possible for retiree healthcare, and we do wield considerable influence in the Legislature. Your advocacy ensures our words carry weight with legislators.

We are working every day to help improve this situation. Ultimately, though, TRS-Care decisions will be made by the Texas Legislature. The best option on the table is HB 3976 and the House budget proposal because it proposes utilization of the Rainy Day Fund, also known as the Economic Stabilization Fund (ESF). It also proposes additional revenue from school district contributions.

The House plan represents a true “shared-pain” solution with the state taking on the biggest portion of total cost for the projected shortfall.

We need your help to keep this bill moving forward through the process. Without your support, the worst possible outcome may occur!

The TRTA Board of Directors is working with our state advocacy team and wants to find additional ways to help retirees. Chief among those areas of improvement are reduced prescription costs for pre-65 retirees. Additionally, TRTA is working directly with Chairman Ashby and other members of the Legislature on various strategies to ensure broad-based acceptance of the TRS-Care Medicare Advantage plan.

While the bill is alive and moving, we have opportunities to work with our friends in the Legislature to accomplish these goals. TRTA SUPPORTS these endeavors!

TRTA does not support doing nothing! As an organization representing more than 82,000 members, the idea of TRS-Care coming to an end is unthinkable. We cannot risk losing access to healthcare!

If you believe in doing something and working for the best possible outcome, please call your state Representative and thank them for helping to pass HB 3976. Thank them for using the Rainy Day Fund to help fund our TRS-Care needs, and ask them to use any and every opportunity to find additional ways to improve this plan for all TRS retirees!

Call your Representative using our toll-free Legislator Hotline at 1.888.674.3788!

Thank you for your help. Thank you for standing with TRTA as we do everything we can to help make this the best possible situation for our retirees. No matter what the outcome, TRTA always will work for you and do our best to protect your retirement security.

TRTA will have more details about HB 3976 as the session unfolds.

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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13 Apr

Texas House Select Committee on State and Federal Power and Responsibility Discuss Resolution to Repeal GPO, WEP

Today, the Texas House Select Committee on State and Federal Power and Responsibility met to discuss several bills, including HCR 101, a resolution that would urge Congress to repeal the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) of the Social Security Act.

Members of the Texas Retired Teachers Association (TRTA) know about these two unfair federal provisions, and that TRTA has been fighting for repeal or modification of them for more than three decades.

The resolution, filed by Representative Abel Herrero (D – Robstown), is one that has been filed during every Texas legislative session by Herrero over the past 12 years. If passed, it is sent to the President of the United States, the President of the Senate and the Speaker of the House of Representatives of the United States Congress, as well as to all the members of the Texas congressional delegation with the request that this resolution be officially entered in the congressional record.

Tim Lee meets with Rep. Abel Herrero.

TRTA Executive Director Tim Lee testified in favor of the resolution, reminding the members of the committee that these unfair provisions take away earned benefits, either spousal (GPO) or one’s own earnings (WEP). Texas educators are often caught off guard by these federal provisions, which financially punish educators during retirement. GPO often eliminates a spousal or survivor benefit completely, while the WEP eliminates up to two-thirds of a retiree’s Social Security earnings.

While TRTA is supportive of HCR 101, we also know that Congress has shown little movement to repeal the GPO and the WEP over the past three decades. TRTA supports the more other measures to repeal the current WEP formula proposed by Congressman Kevin Brady. As you may have read in a recent Inside Line update, Congressman Brady affirmed to TRTA that his top personal priority as a legislator is to pass WEP reform.

While Brady, who heads the Congressional House Ways and Means Committee, is focused on major policy issues such as tax reform and the Affordable Care Act (ACA) right now, we can expect to see a new bill addressing the WEP this congressional cycle. During the last congressional cycle, Brady filed H.R. 711, the Equal Treatment of Public Servants Act, which proposed to provide a rebate to retirees who fall under the WEP, as well as reforming the unfair formula for future retirees.

H.R. 711 received considerable support, including more than 100 Congressional cosponsors. However, stakeholder groups could not come to a final agreement on the bill’s changes to the WEP. The bill was delayed in committee, with a promise from Brady to continue moving forward with even better resolutions. When Brady re-files this legislation later this year, the bill will have a new number.

Congressman Brady also vowed to continue working closely with all stakeholders, including TRTA, to make the legislation work for everyone. The Government Pension Offset (GPO) may also be a part of this conversation. According to the congressman, it is possible that the GPO could be addressed in any upcoming legislation reforming the WEP as well.

What You Can Do Now to Support Repeal of the WEP and GPO

While there is not yet a bill number for reforming or repealing the WEP and GPO, members can still call their congressmen today and express their support for Congressman Brady’s efforts to change these unfair provisions. Let them know you want to see these unfair provisions reformed and you would like their support when Congressman Brady’s bill is filed later this year.

Find your U.S. Representative by clicking here.

Call your U.S. Senators, John Cornyn and Ted Cruz, using the phone numbers listed below:

John Cornyn: 202.224.2934        Ted Cruz: 202.224.5922

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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12 Apr

Senate Bill 788 Pulled From Consideration

Earlier today Senator Joan Huffman (R-Houston) removed Senate Bill 788 from the docket to be considered by the Senate. The bill would have made major reforms to TRS-Care, including creating a high deductible health care plan for pre-65 retired educators and switching all Medicare eligible retirees to Medicare Advantage.

Now that the bill has been pulled, alternative legislation needs to be proposed to fund and maintain TRS-Care. If no alternative legislation is proposed and passed, TRS-Care will not be able to continue. According to the Teacher Retirement System of Texas (TRS), without new funding and plan design changes, TRS-Care will be sent into a “death spiral.” If this occurs, retired teachers’ health care will go away. TRS-Care’s current budget shortfall is $1 billion.

Retired teachers are willing to do their part in contributing towards a solution to this shortfall. However, some of the provisions in SB 788 were beyond retirees’ means. In particular, the $4,000 deductible and $7,150 out of pocket maximum, combined with no prescription drug plan, was untenable for many pre-65 retirees. The plan could have forced many retirees into poverty in order to maintain the health care plan.

With no Senate action on the immediate horizon, the need for TRTA members to support the House of Representatives’ efforts to propose and pass legislation reforming TRS-Care has increased. We will work with House leaders and appropriators to craft a solution that helps our members and allows them to have access to affordable health care.

The Texas Retired Teachers Association (TRTA) would like to thank the members of the Senate for supporting retired teachers, and we ask them to remain dedicated to finding ways to keep TRS-Care affordable. We look forward to working with legislators to pass legislation to keep TRS-Care sustainable now and into the future.

The legislative process is complex and fast moving. More details will be forthcoming as we receive them.

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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