Is Texas Single Payer Government Health Plan Imploding?

The TRS ActiveCare program is a ticking time bomb for Texas conservatives and a point of light for Texas liberals. Unless it’s fixed quickly Texas will become a Blue State faster than a melting raspa in deep South Texas on an August afternoon.

By Molly Mulebriar

The seed to Texas adopting a government sponsored single payer health plan goes back to 1936 when voters approved an amendment to the Constitution of Texas creating a statewide teacher retirement system (TRS). With the passage of enabling legislation passed in 1937, TRS was officially formed.

Fast forward to 1995 when TRS was authorized to offer a health insurance program for active public school employees in addition to retirement benefits already in place. In 2001, TRS was given the responsibility of administering a new statewide single payer government health care program for eligible public school employees and dependents which is today is known as TRS-ActiveCare.

Districts that opted into the program are prohibited from ever leaving and they cannot offer school district employees a competing private health care plan through the open market. There are currently +90% of Texas school districts enrolled in TRS ActiveCare comprising over 400,000 members.

Economies of scale may have materialized somewhere in the TRS ActiveCare equation but there is little evidence of it. Costs keep going up while benefits keep going down.  It’s no longer affordable, especially if you have to use it.

What happened?

The TRS ActiveCare program is flawed in many respects, leading to erosion of benefits and increasing costs. Adverse selection is a serious problem and gaming the pre-existing condition requirements for political gain is a known practice (Texas School Districts – Insurance Fraud & Political Empowerment). Reliance upon managed care contracts has proven costly, with provider reimbursement rates guaranteed to contractually increase year after compounded year.

As a result of worsening benefits and higher costs, many districts now want to offer employees a choice between the government plan and a private commercial plan. Employees are demanding it. Two districts have found a way to do just that, or so they believe ((Second Texas School District Challenges TRS ActiveCare Mandate) .

The Texas legislature so far has refused to act to fix TRS ActiveCare. The easy solution would be to throw more money at it but that hasn’t happened since 2001. They could find alternate solutions the open market has to offer but they are not doing that either. Meantime Texas school district employees suffer through higher insurance costs, higher out-of-pocket expenses and less take home pay. As the program continues to degrade more and more of the financial burden falls on plan members.

One must ask, who in the world would want to be a Texas school teacher these days? With average salary of $50,000 (before taxes), car payment, house mortgage and health insurance premiums it’s impossible for many to achieve the quality of life promised by way of a college diploma (which costs +$100,000). God Forbid if one actually uses the insurance with an annual maximum out of pocket approaching $30,000 in some cases.

The TRS ActiveCare program is a ticking time bomb for Texas conservatives and a point of light for Texas liberals. Unless it’s fixed quickly Texas will become a Blue State faster than a melting raspa in deep South Texas on an August afternoon. A 400,000 voting block can make the difference.

 

 

 

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