Texas Backs Government Health Plan

By Bill Rusteberg

Texas recently gifted TRS ActiveCare $721,000,000 in additional funding ostensibly to cover claim losses for this +400,000 member government health plan in order to reman competitive. This cash infusion comes just at the right time as TRS ActiveCare is fighting to stay relevant since passage of Senate Bill 1444.

“In April, Gov. Greg Abbott announced the allocation of $435 million in CARES Act funding to help keep TRS-ActiveCare rates flat for the 2022-23 school year. That money was in addition to the $286 million in American Rescue Plan funds already committed by state lawmakers to TRS to help defray COVID-19-related health care costs.” SOURCE ARTICLE HERE

Senate Bill 1444 allows, for the first time in 20 years, member districts to opt out of the failing TRS ActiveCare government health plan and seek coverage in the commercial market.

A $721,000,000 cash infusion gives TRS ActiveCare a competitive edge against commercial carriers that must underwrite risk without the promise of government subsidies.

Segal Consulting, in a presentation made to TRS ActiveCare Board of Trustees last month, opined the real cost of the program averages a far higher number than current contributions.

It will be interesting to see what the Texas legislature does in the upcoming legislative session to keep TRS ActiveCare relevant.

The market 20 years ago when TRS ActiveCare was implemented is completely different than it is today. TRS ActiveCare was designed to remove hurdles to care for small struggling school districts back in the day. Since then legislation both on the state and national level has removed pre-existing condition hurdles and has mandated guarantee-to-issue rules.

TRS ActiveCare is not the only “safe harbor” these days. Anyone who wants health insurance these days can get it whereas 20 years ago that was not the case at all.