TRS-Care's Status Heading Into the 86th Texas Legislature
TRS-Care is the health care program provided by Texas to its retired school personnel. The program was initially created in 1985 as a stopgap measure but has continued on to become an enormous health care program. TRS-Care covers more than 233,000 lives, but recent changes to the program’s benefits and costs have driven 36,400 participants away from the program.
During the 2017 Texas legislative session, TRS-Care faced a $1.1 billion shortfall. The shortfall was caused by a lack of funding for TRS-Care. The resulting legislation left many retirees with an unaffordable health care program.
TRS-Care is again projected to have a shortfall in 2019. The shortfall is estimated to be in excess $400 million during the next biennium.
The health care program is continuously having shortfalls because its funding is not tied to the cost of the program. The base funding for TRS-Care is linked to active teacher payroll. Health care costs have been increasing at a much higher rate than active teacher payroll, which is leading to the shortfalls.
The Texas Retired Teachers Association (TRTA) has supported bills that would pre-fund TRS-Care and prevent the funding shortfalls. However, the cost of pre-funding TRS-Care is extremely high.
The future of TRS-Care is uncertain. The Texas House Pensions Committee met on May 10, 2018. The committee discussed the future of the TRS-Care plan and accepted public testimony.
TRTA Executive Director Tim Lee was a part of the committee’s invited testimony.
“The bottom line is that the Legislature is in absolute control over the funding levels for TRS-Care. Using teacher payroll as a basis for funding is a broken system,” Lee said. “In order to keep TRS-Care viable and solvent, we need to work with legislators on increasing the base funding for TRS-Care. If we do not raise the base funding, TRS-Care will continue to have ongoing shortfalls and retirees will not be able to cover the increased costs.”
Texas retired educators live on a fixed income. The average retiree receives $2,035 per month from the TRS pension. Ninety-five percent of Texas retirees did not pay into Social Security during their careers, and federal provisions called the Windfall Elimination Provision and the Government Pension Offset often harm those who do receive Social Security.
The best way to support change for TRS-Care is to stay tuned to TRTA’s email newsletter, the Inside Line. The November General Election will be critical to deciding the future of TRS-Care, as the legislators voted in will control how much money is put into the health care system.