Use our Action Alert to email your Senator today or call 1-888-674-3788 to talk to your Senator today!
The Texas Senate is preparing to vote on SB 788. SB 788 proposes to dramatically alter the state-run retiree health insurance program, TRS-Care. SB 788 is on the state’s intent calendar. Bills on the intent calendar can be called to vote at any time.
Authored by Senator Joan Huffman (R-Houston), SB 788 proposes to move all pre-65 retirees into a high deductible health care plan. The deductible is expected to be $4,000. Meanwhile, all Medicare eligible retirees, those ages 65 and older, would be put into Medicare Advantage.
The Senate’s budget plan includes $311 million to help fill the $1 billion budget shortfall for TRS-Care. The bill would accomplish this by increased the State’s contribution level to TRS-Care from 1 percent of active teacher payroll to 1.25 percent. However, retirees would pay for the remainder of the budget shortfall, which is projected to be close to $700 million.
The Houston Chronicle released an op-ed on April 7 detailing why they believe SB 788 is a raw deal for retirees:
“Here’s why lawmakers’ math doesn’t add up: Approximately 56,000 teachers with roughly 22,000 dependents have retired after decades of service, are under age 65 and have not yet qualified for Medicare. The average annuity payment for a retired teacher is $2,035 month, before federal income tax. Under the Senate plan, the proposed deductible for the TRS-Care plan would rise from around $400 to $4,000 for an individual. Prescription medication is also subject to the deductible, as there is no prescription drug coverage with this proposal.”
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 with a $4,000 deductible
· Calendar Year 2019: Retiree only – $310/month, or $3,720 annually with a $4,000 deductible
· Calendar Year 2020: Retiree only – $370/month, or $4,440 annually with a $4,000 deductible
· Calendar Year 2021: Retiree only – $430/month, or $5,160 annually with a $4,000 deductible
* These are illustrative premiums; actual premiums will depend on funding and plan experience.
Retirees 65 and over would have a health care plan with a $146 per month premium. These retirees would be put into Medicare Advantage. You can read TRTA’s full report on SB 788 from its Senate State Affairs meeting.
Retirees are willing to do our part, but the Legislature must work with us to keep TRS-Care affordable. Please call and email your Senators today to voice your concerns about SB 788. Use our legislative hotline (1-888-674-3788) to call your Senators today!
TRTA members have communicated loud and clear that this plan is unaffordable, and many have recommended the following changes:
- The deductible should be lowered from the staggering $4,000 amount.
- The Legislature must ensure adequate medical coverage for those in Medicare Advantage. Retired teachers must be assured that there will be network coverage in their area. Many doctors and health care providers tell retirees that they do not accept Medicare Advantage.
- The bill should provide a plan for prescription drug coverage for pre-65 retirees.
- The Legislature must agree on additional funding for TRS-Care. Current budget scenarios suggest that retirees will carry a disproportionate share of the cost.
You can learn more about the TRS-Care issue by visiting our fact page.
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.