The perception among many is TRS ActiveCare is going broke and state supplement funding is the only reason the program remains solvent. But then we hear the opposite from officials in Austin.
Was the purpose of supplemental funding to stave off insolvency or was it designed to lower rate increases? What’s the difference?
We asked ChatGPT “Why Did Texas Gift Supplemental Funding to the TRS ActiveCare?”
Here’s the response:
Texas provided supplemental funding to TRS‑ActiveCare because the program was facing a widening gap between premium levels and the actual cost of medical and pharmacy claims. Without intervention, employee premiums would have risen sharply.
Core reason
The Legislature added $369 million in supplemental funding to hold down premium increases while TRS gradually realigns premiums with real claims costs. This prevents a sudden spike in what employees pay and smooths the transition back to actuarially sound rates.
Why the funding was needed
- Premiums were artificially held flat in 2023 at the Legislature’s direction, creating a structural shortfall between revenue and claims.
- Health‑care inflation and rising claims costs continued, widening the gap.
- Without state support, TRS‑ActiveCare would have needed much larger premium increases for 2025–26 and beyond.
- The supplemental funding allows TRS to follow a multi‑year “glide path” to bring premiums back in line with actual costs without shocking employees with sudden increases.
What the supplemental funding accomplishes
- Keeps average statewide premium increases to about 10% instead of significantly higher.
- Saves employees an estimated $1,350 on average over the biennium.
- Covers roughly 8% of total premium costs for the plan year.
- Helps stabilize the plan while maintaining benefit enhancements and regulatory alignment.
Bottom line
Texas provided supplemental funding to protect educators from steep premium hikes, stabilize TRS‑ActiveCare after years of underfunding, and give the program time to realign premiums with actual health‑care costs.
HOMEWORK READING ASSIGNMENT:
TRS ActiveCare – Seven Reasons Districts Opt Out
Is TRS ActiveCare The Best Option For Your District?
Thinking About Leaving TRS ActiveCare?
