These rates will save Killeen Independent School District $10,000,000 in 2024
“The proposed rates for Killeen ISD are higher than the region’s rates but are still going to save Killeen ISD about $10 million off of the projected spend if they had stayed with their current provider.“
TRS ActiveCare (TRSAC) officials met December 7, 2023 to hear an update on the TRSAC plan’s performance.
Among other items of interest TRS ActiveCare officials received a report on the Killen ISD’s move from the commercial market to the TRSAC program effective January 1, 2024.
“Ms. Daniel reported that Killeen ISD approached TRS in May about joining TRS-ActiveCare. She noted Killeen had never been in TRS-ActiveCare and their plan year followed a calendar year as opposed to the academic year that ActiveCare follows.”
“The proposed rates for Killeen ISD are higher than the region’s rates but are still going to save Killeen ISD about $10 million off of the projected spend if they had stayed with their current provider. Ms. Daniel said the proposed rates will start in January and run through end of August and then in September Killeen ISD will be included in Region 12 rates.”
The question now becomes how will Killeen’s entry into the program affect Region 12 rates next year? Why leave $10,000,000 on the table when you could have left a lot less, if any at all?
TRSAC FINANCIALS
Trustees were provided a financial update for fiscal year 2023 indicating a 114.7% loss ratio. A loss ratio of that magnitude is not sustainable since PPO managed care network contracts have historically proven to drive medical trend, on average, to double digits year over year.
The good news for TRSAC trustees is supplemental state funded appropriations made in prior 2022 fiscal year of more than $600 million ($628,337,761) was enough to offset 2023 plan losses allowing the program to remain solvent for one more year. Districts outside of TRSAC don’t enjoy the same luxury.
The financial report summarizes by stating:
“The TRS-ActiveCare Fund balance is managed to prevent a deficit through premium and benefit adjustments”
This Formal Statement promulgates traditional methods of controlling health care costs by throwing more money at the problem while reducing benefits at the same time.
Here is a common sense translation for our readers:
“The TRS-ActiveCare Fund Balance is a direct result of our failure to control health care costs through proven risk management strategies emerging in the commercial market with good success. Rather, we continue to practice the old and failed methods of controlling costs……………which don’t.”
