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House backs bill putting $212 million toward retired teachers' health care program

The Texas House voted Tuesday to use $212 million from the Rainy Day Fund, a savings account largely fed by oil and gas production taxes, to decrease premiums and deductibles for retired teachers in the state-run health insurance program.

Rep. Trent Ashby, R-Lufkin, speaks on House Bill 20 surrounded by colleagues on the House floor August 1, 2017. The bill would put a one-time influx of $212 million into a health plan that serves hundreds of thousands of retired teachers.
*Clarification appended.

Editor's note: This story was updated to reflect that the Texas House gave final approval to House Bill 20.

The Texas House has approved taking money from a state's savings account to pay to temporarily bolster the state-run health insurance program for retired teachers.

The lower chamber voted 130-10 Tuesday to pass House Bill 20 authored by Rep. Trent Ashby, R-Lufkin, which would put a one-time influx of $212 million into TRS-CARE, the health plan that serves hundreds of thousands of retired teachers. A group of House members argued against using the state's Economic Stabilization Fund, also known as the Rainy Day Fund, especially since the Senate has made it clear they would not approve that payment mechanism.

After the House gives HB 20 final approval, the measure will head toward the Senate, which advanced its own legislation on the issue last week. (Update, Aug. 2: The Texas House gave final approval Wednesday to House Bill 20.)

During the regular session, legislators voted to put $483 million into the Teacher Retirement System for the next two years but changed the structure of the program, leading to higher deductibles and out-of-pocket costs, especially for retired teachers younger than 65. Last month, Gov. Greg Abbott added the issue to his agenda for the July-August special session.

"I've heard from hundreds of active and retired teachers from across the state on how these changes would affect their lives," Ashby said Tuesday. "It became apparent to me that more needed to be done."

In its own legislation, the Senate proposed using an accounting maneuver to borrow $212 million from health care companies providing Medicaid, instead of dipping into the Rainy Day Fund. Both bills would help cut deductibles by half for retirees younger than 65, lower costs for retirees with adult disabled children and reduce premiums for retirees 65 and older. Many retirees would not get any relief through this bill.

Sen. Jane Nelson, R-Flower Mound, who authored the Senate's version of the bill, has said using the Rainy Day Fund is a "false promise" and short-term solution.

Ashby said Tuesday he was open to "working with the other team" on how to finance the health care program's improvements during the special session. But he also said of the Senate's accounting trick: "I just don't think that's a fiscally prudent thing to do." He likened the House's plan to paying with cash and the Senate's deferral to putting $212 million on a credit card.

A faction of House members disagreed with Ashby's financing plan Tuesday, including Rep. Mike Schofield, R-Katy, who proposed an amendment for "those of us who do not want to use the Rainy Day Fund but who do not want to vote against our teachers."

Rep. Jonathan Stickland, R-Bedford, part of the House's "Freedom Caucus," called Ashby's bill "disingenuous" in using the Rainy Day Fund for a one-time expense. He said he was voting against "political maneuvering," not against retired teachers.

"I feel like today we are asked to take this very very tough vote for a lot of us because we have stood with retired teachers," he said. "This way is setting a very, very bad tone."

Clarification: This story has been updated to more precisely describe the state's Rainy Day Fund. 

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