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Letter to Lawmakers: TRS Healthcare Must be Reformed Now

The evidence is indisputable that active and retired school employees need relief from the already high and rising costs of health care. Only state lawmakers can fix this problem. We can all urge lawmakers to make this issue a top priority in the 2015 legislative session. Copy and paste this letter provided by AFT and send it to your state representative, state senator, and top statewide elected officials:

"Active and retired school employees need your help. They need relief from the high and rising costs of health care.

Current state funding structures for vital health-care benefits are not fit to sustain them over the long term. The state has been limiting its own contributions while shifting more of the costs of care onto the shoulders of active employees and retirees, to the point where decent health-insurance coverage is increasingly unaffordable. Here are the facts:

--For the retiree health-care program, a billion-dollar shortfall is projected in the 2016-17 biennium. Meanwhile, active employees face ever-growing premiums and are being pushed rapidly toward lower-benefit plans.

--TRS-Care, the health program operated by the Teacher Retirement System of Texas for retired school employees, was established in 1985 with a “temporary” funding mechanism that practically ensures the program will never be adequately funded. Almost 30 years later, that “temporary” mechanism is still in place.

--Required TRS-Care contributions from the state, active employees, and school districts are based on payroll, not on actual health-care costs. As a result, the survival of TRS-Care has depended on intermittent infusions of additional cash from the state, occasional premium and benefit restructuring, and higher premiums and out-of-pocket costs for retirees.

--Premiums for retirees would have to triple to cover the full projected 2016-2017 shortfall for TRS-Care. For retirees, who have seen the real value of their pensions eroded by more than 20 percent due to inflation over the past dozen years, that is a frightening prospect.

--For active school employees, too, state funding for health care bears no relationship to actual costs. Active employees are eligible to get health-care coverage through their employing school districts. About half of active Texas school employees work in districts that participate in TRS-ActiveCare, a health program operated by TRS under legislation passed in 2001, and about half work in districts that provide health coverage through self-insurance or through commercial health insurers. State contributions and the minimum school-district contribution for premium-sharing assistance were set in 2001 at $225 per month—$75 from the state and $150 from the district. Those fixed amounts have not been increased, despite years of rising health-care costs.

--The state instead has shifted an ever-larger share of costs onto active employees. In 2004, $225 of premium assistance covered 68 percent of the employee-only premium for ActiveCare-2—a plan with modest benefits. Ten years later the guaranteed state and district premium assistance only covers 43 percent of the premium.

--As premiums have gone up, the employee’s premium share since 2004 has risen to 57 percent from 32 percent, and at the same time the benefits of the ActiveCare-2 plan have eroded, causing employee out-of-pocket costs to rise as well. Last year, premiums for ActiveCare-2 increased 15 percent over the previous year. Not surprisingly, participation in ActiveCare-2 dropped by 12 percent last year.

Health-care coverage for active and retired school employees alike is simply becoming unaffordable. I ask for your commitment to stop the shift of health-care costs onto active and retired school employees and to increase state and district funding for health care so that active and retired school employees can afford needed coverage."

Thank you for your support.

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