Texas Teachers Migrate To High Deductible Plan

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Many Texas educators are insured through the Texas TRS ActiveCare health plan. Projecting a $54 million deficit for the upcoming FY 2017, TRS trustees realized plan benefits and premiums changes were necessary. More and more plan participants are selecting  the high-deductible plan option with lowest costs and lowest benefits………………

SOURCE: www.texasaft.org

TRS-ActiveCare

TRS health care benefits for active school employees are paid for with: (1) employees’ premiums; (2) premium sharing by employing school districts; and (3) state premium sharing of $75 per month. In addition, employees make significant out-of-pocket payments for deductibles, co-insurance and co-pays.

For upcoming FY 2017, the cost of current benefits was projected to be some $54 million above program revenue based on current FY 2016 premiums. Closing that gap with premium increases alone would have led to an overall 2.9 percent increase—all of which would fall on employees—at an average 6.2 percent—unless their district increased premium sharing. Following TRS staff recommendations, the board chose a combination of benefit reductions and premium increases. Overall, premiums will increase 2.5 percent but, without higher district sharing, the average hit to employees’ pockets is 4.2 percent. Between the premium increases and benefit reductions, the almost 270 thousand school employees enrolled in TRS-ActiveCare will see their health-care costs rise by an average of about $17 per month.

In addition to those changes for the ActiveCare preferred provider organization (PPO) plans, the board adopted rates and benefits requested by the health maintenance organization (HMO) plans. FirstCare and Scott & White participants will have higher premiums and benefit reductions. Allegian premiums will increase but benefits will be largely unchanged.

The adopted premium and out-of-pocket cost increases to employees will almost certainly sharpen the five-year trend of rapidly declining enrollment in the moderate benefit ActiveCare 2 plan—the highest cost and highest benefit option now available—and rapidly rising enrollment in ActiveCare 1HD—the high-deductible plan with lowest costs and lowest benefits. Further, more employees will be forced to drop coverage for their family members and more of those few who can obtain less expensive coverage in the public marketplace will drop coverage through their districts entirely. Absent significant action by the legislature early in the next session, those movements toward lower-quality health care will accelerate in FY 2018 and beyond.

(Tables are available for download here.)

(Details of TRS-ActiveCare premium and benefit changes are available here: http://www.trs.state.tx.us/active.jsp?submenu=trs_activecare&page_id=/TRS_activecare/plans.)

Editor’s Note: What will the state legislature do to address financial solvency for FY 2018? Will districts be allowed to jump ship? Will the state increase their $75 contribution? They will begin work on that in January.

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