Painful cost increases for Texas public education retirees

Published 8:48 am Saturday, July 22, 2017

Editorial by Tim Lee

 

During the 85th Legislative Session, TRS-Care faced dire circumstances that resulted in painful cost increases for Texas public education retirees. As the Executive Director of the Texas Retired Teachers Association (TRTA), I have heard from thousands of retired school personnel about how the new health insurance plans, which go into effect in January 2018, will impact their fixed monthly annuities.

 

This session was not the first time that TRS-Care faced funding problems. In 2015, a $768 million shortfall was paid for in full by the Legislature. This session the shortfall grew to more than $1 billion. A state budget deficit made it nearly impossible to fund the shortfall without structural changes. If nothing had been done to address TRS-Care, the shortfall would have reached $3 to $4 billion in two years.

 

This unfortunate reality led lawmakers to study TRS-Care’s prospects for longevity. An interim study was conducted by members of the House and Senate in 2016. I heard disturbing testimony from the Teacher Retirement System of Texas (TRS) that without legislative action, retiree premiums would skyrocket to as much as $1,500 per month. Knowing that no retiree could sustain such a high premium on an average monthly income of $2,000, TRS made clear that the program would close entirely before the next session. The choice to eliminate access to health care for retirees was not one that TRTA supported.

 

The Texas House of Representatives, who stepped up to support teachers and public education for the entirety of the 85th Legislative Session, did the same for retired educators and the future of TRS-Care. While some retirees may not like all changes agreed upon in House Bill 3976, without its passage, TRS-Care would have faltered and every retiree in the program would have faced a much bleaker, harsher reality.

 

House Bill 3976 shares TRS-Care plan costs by increasing contributions from the state and school districts. Going forward, these permanent increases in funding will help ease some of the growing financial burden on retirees. Chairman Trent Ashby (R-Lufkin), who carried the bill, and his House colleagues worked alongside TRTA and others to secure additional funding: $500 million from the Economic Stabilization Fund (Rainy Day Fund). The House unanimously approved this plan, and TRTA considered this a comprehensive solution alongside the bill. Ultimately, the Senate did not agree with utilizing Rainy Day dollars to soften the blow and extend the solvency of TRS-Care.

 

Still, funding for TRS-Care will continue to be an issue. I am concerned that retirees living on fixed incomes will lose access to healthcare due to ever-increasing medical costs. This is not the vision I have for our dedicated public education employees. A better solution with more funding can and should be found to ensure our retirees have access to quality, affordable health care.

 

Retirees are scared and unsure of how to deal with changes of this magnitude. Many educators have difficulty understanding how TRS-Care fell into such grim circumstances. Some retirees have even raised concerns about their legislators not supporting them in the struggle to maintain the program.

 

Most retirees, however, do not know how close TRS-Care came to failing. It took an amazing effort led by Chairman Ashby, dozens of legislators – including Representative Dade Phelan and thousands of TRTA members to keep the unthinkable from happening. House Bill 3976 keeps TRS-Care alive and gives us the most valuable resource we need to truly solve this problem: Time. A better solution would be impossible to reach if the program collapsed.

 

To see this issue resolved, retired educators should ask Governor Greg Abbott to make TRS-Care a top priority in the upcoming special session. With billions of dollars in the Rainy Day Fund, more should be done to help retirees.

 

Tim Lee is the executive director of Texas Retired Teachers Association