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TRS Care Crisis Demands Action

Time to take care of Texas teachers
Photo by Erich Schlegel/Getty Images

There are approximately 9318 public schools in Texas and 325,294 public school teachers in the classrooms. But despite their personal and professional diversity, they share many common concerns and goals. Prominent among those is a need for affordable good-quality health care.

The evidence is indisputable that both active and retired school employees need relief from the high and rising costs of health care. Current state funding structures for health-care benefits are not adequate to sustain them in the coming years. 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 shortfall of almost $875 million 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 almost 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. 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. TRS-ActiveCare health plans are offered in districts employing about one-half of all Texas active school employees but the situation in ActiveCare plans is illustrative of that in districts with self-insured or commercial health-care coverage plans.

• 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 is a critical benefit that all people must have, but is simply becoming unaffordable and unmanageable. A long-term solution requires reform of our state’s revenue structure. There are many outdated loopholes and the current tax system must be reformed and brought up to date.

As we begin another school year, let's reflect on the issues that matter. Schools have so many challenges: fighting the push to privatize, politics, shrinking budgets with increased class sizes, and teacher retention. If legislators treat these problems with due diligence and appropriate intervention, we can grow stronger schools, better teachers, and students who thrive.