Senate Finance Committee Continues Discussions on Funding Health Care

Today, February 1, 2017, the Senate Finance Committee met to continue its discussion about funding vital programs in the state budget, including the TRS-Care retiree health insurance plan.

The committee’s discussion picks up from a meeting held on January 24. You can read TRTA’s comprehensive overview of last week’s meeting by clicking here.

Funding for TRS-Care, the health insurance plan that covers more than 250,000 lives, is a major concern for public education retirees this session, as the program faces a $1.1 billion shortfall. During the previous legislative session in 2015, a similar shortfall of $768 million was covered by the state. It was understood at the time that the infusion of funds was a temporary fix for a program that needed long-term solutions.

As part of last week’s Senate Finance discussions, a work group of Senators on the committee was formed to review all state-vested health care plans. The following Senators will serve on the work group: Charles Schwertner, Chair; Joan Huffman; Lois Kolkhorst; Robert Nichols; Carlos Uresti; Kirk Watson; and John Whitmire. The work group will host its first public hearing this Friday, February 3.

While TRTA is ready to discuss options such as health care containment with the Senate work group to help find increased savings for TRS-Care, these efforts alone will not solve the problem. More appropriations are necessary to resolve the current shortfall, and keep the program sustainable for the future.

The Texas Retired Teachers Association (TRTA) asked members to complete a short survey last week in preparation for today’s Senate Finance meeting. Several thousand TRTA members responded, answering general questions about how a large increase in premiums would affect them financially and what changes in the program would be most acceptable to them.

Senate Finance Committee Chairman Jane Nelson said during the meeting that the state would need an additional $5.6 billion this session just to maintain ALL of its health care programs as they are, not accounting for the continuing rise in health care costs going forward. The work group will be responsible for trying to find ways to contain these costs, not just for TRS-Care and TRS-ActiveCare, but also programs run by the Employees Retirement System of Texas (ERS) and others.

Teacher Retirement System of Texas (TRS) Executive Director Brian Guthrie spoke briefly as part of a panel of agency leaders, stating that TRS “relies heavily on third party administrators to find cost-saving opportunities.” He also said that most participants in TRS-Care live in rural areas of the state, making access to health care an issue for some.

Senator Charles Schwertner asked the agency heads if there had been a dramatic reconsideration of benefit and plan design at the board level, expressing concern that third party administrators were controlling too much of the decision-making process in those areas. He also pointed out that cost growth for some state health care plans is at 8.5 percent, higher than some federal plans.

As Chairman Nelson redirected the meeting, she stated that “ultimately, our goal is to improve quality and reduce costs,” reminding everyone in attendance that delving into issues such as the one being discussed by Senator Schwertner would be vital during the special health care work group meetings.

TRTA Executive Director Tim Lee has been invited to testify at Friday’s health care work group meeting. The meeting will begin at either 9:00 a.m. or upon adjournment of the Senate Finance Committee meeting in room E1.036 of the Texas Capitol extension building. Public testimony will not be allowed during this meeting. However, TRTA will be sure to provide a thorough update once the meeting adjourns. A live webcast of the meeting should be available from this website once it convenes this Friday.

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Thank you for your membership to TRTA. If you are not yet a member, we need you to help us protect your retirement security. Please join TRTA today!

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