Teacher groups on Thursday renewed their call for the Legislature to put more money into a health insurance plan that has seen school employees foot an increasing share of the premiums as the state contribution has remained the same.
The employee share of premiums has more than doubled since 2003, the year after state lawmakers created the plan known as TRS-ActiveCare, while the state’s contribution has remained fixed at $75 per employee per month. Nearly 300,000 teachers, school employees and their dependents are covered under the plan, used by almost all of the state’s 1,200-plus school districts. The employee share of premiums last year ranged from $325 to $555 per month for employee-only plans.
“School employees really can’t go any longer without some help on health insurance. They can’t handle additional cuts in benefits and they desperately need more funding from the state to be able to afford their health insurance,” Ann Fickel, associate executive director of the Texas Classroom Teachers Association, told the Teacher Retirement System board Thursday.
The retirement system held a daylong town hall to answer questions — submitted in person and online — about the affordability of TRS-ActiveCare and potential changes to that plan, along with another that covers more than 200,000 retired school employees.
That plan, known as TRS-Care, had been on track to run out of money this fall and accrue a $768 million shortfall by the end of fiscal year 2017 if no new money was injected into the plan fund. State lawmakers opted to fully fund it earlier this year so the system wouldn’t have to increase retiree premiums, although they only put in enough money to do that for the next two years. And they didn’t make any changes to TRS-ActiveCare — despite pleas from teacher groups.
Significant changes are needed to make TRS-Care financially sustainable, retirement system Executive Director Brian Guthrie said Thursday. Before this year's legislative session, the agency devised a variety of options for the Legislature to consider.
As for ActiveCare, it “has an affordability problem,” he said. “It’s not that we’re not able to negotiate better pricing ... The issue with ActiveCare is that you have a program set up where the state will only contribute a fixed amount and the employer (district) will only contribute a fixed amount.”
That means any cost increase is “borne by the member,” Guthrie said.
For some school employees, those cost increases have more than doubled, said Noel Candelaria, a special education teacher and president of the Texas State Teachers Association.
“Employee premiums have increased 10 times since 2003 — by as much as 238 percent for some employees — at a time when budget cuts have left Texas teacher pay stagnant, $7,000 below the national average,” he said.
Fickel, of the classroom teachers association, said teachers are avoiding medical care or forgoing insurance coverage for their dependents because of the cost increases and are not willing to absorb any more cost increases. She cited data from the Kaiser Family Foundation that shows Texas school employees foot 63 percent of their health insurance premiums on average, compared to a national average of 17 percent.
A special legislative committee, with three members from both the House and Senate, will study reforms for each health care plan and make recommendations before lawmakers convene for their next regular legislative session in 2017.
Asked earlier this year why the Legislature didn't address teacher health care, the Legislature's lead budget writers cited competing priorities — such as tax cuts and border security — as well as the economic uncertainty associated with low oil prices. Lawmakers left billions of dollars unspent in the budget they approved.
Still, several key leaders have vowed to tackle teacher health care next session.
“I am glad that the House is going to address the shortage of funding for retiree health care over the next two years as we continue to assess long-term solutions in my committee for those who served our state and our school children for so many years,” state Rep. Dan Flynn, R-Van, the committee's co-chairman, said earlier this year when the House introduced legislation to shore up TRS-Care.
Addressing the Teacher Retirement System board on Thursday, a retired Austin teacher noted that the state has largely funded the TRS-Care on an ad-hoc basis since creating it in the 1980s, meaning it has never had a sustainable stream of revenue. (Lawmakers last tweaked the plan in 2004 to create a decade of solvency, according to the retirement system.)
“We cannot keep going back to the Legislature time after time begging for money,” said the retiree, Tom Rogers. “We’ve just got to get something there that is steady.”
Disclosure: The Texas Classroom Teachers Association and Texas State Teachers Association are corporate sponsors of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.