TX House of Representatives Hearing on Pensions

• In May, I attended this hearing on behalf of my clients in education, below are some of my notes:
  
  • What is the problem with TRS Care? TRS has 1.5 million members currently. TRS Care was begun in 1985 and was funded for 10 years with the idea funding would be updated as needed. It was ignored by the Legislator and Governors until Summer, 2017. The Need: sustainability into the future. The 2017 Summer Session set it up so premiums would rise and increase out-of-pocket with a $700M infusion from the State. They knew then that an additional $200-$400M would be necessary when the next Regular Session meets next year. That number has now grown to $400-$600M.
  
  
  • Why is TRS Care in need of updating? more teachers are taking early retirement (before 62 years of age) than anticipated, healthcare costs have risen, drug costs have risen and people on TRS Care go to emergency rooms for care that should be provided by a much-cheaper UrgentCare center (Emergency room cost are typically 3-5 time the cost of an Urgent Care)
  
  
  • What is TRS doing to help this issue? TRS is encouraging educators to retire at 62 or later because they need more money flowing in longer. The current average for retiring educators is just slightly over 60 years of age. TRS is updating contracts with providers and has canceled others to save money. TRS feels they are to blame for some of the misinformation because during the summer; they failed to communicate fully with retirees about the needs and solutions. That led to some teacher groups reporting on hearsay and that led to some misinformation.
  
  
  • What if the Legislature and Governor had done nothing last summer? No one wanted what would happen if there had been no additional funding by the State, there would have been NO benefit.
  
  
  • FUN FACT: There are 230 thousand people on TRS Care
  
  
  • What were the Other Changes to Offset the Shortfall? creating a new high-deductible plan, increased contribution and offering a more basic minimal plan; one plan that was too expensive to sustain and was done away with (Plan 2).
  
  
  • Some retirees went with the ObamaCare marketplace; what happened to them? Some states do not offer a TRS Care-like plan at all for retirees; of those, some are beginning to form negotiating groups to share costs. Currently, 70% of retirees are Medicare-eligible (meaning 65+ OR, have a disability) and 30% of retirees are non-Medicare eligible (these are our early retirees who are under 65). Hoping to change that ratio of 70/30, TRS offered people a one-time opportunity to return to TRS Care once they went out into the MarketPlace and didn’t like it. RESULT: some came back, especially those who still have dependents because the MarketPlace was too expensive. That was opposite of what TRS expected. 92% of TX Districts are in TRS Care. If 100% were in the system, the negotiating power or TRSCare would be greater.
  
  
  • What happened to the contribution-share by school districts? Many districts reduced their contribution share for each member in order to provide salary increases. Their ratio of contribution was supposed to be at 70/30 (70% from the district, 30% the member). That has changed in certain districts.
  
  
  • What does TRS do about costs? TRS sees the role as trying to accurately assess future costs; they do not want to underestimate.
  
  
  • Personal Observation: I watched individual after individual testify before the House Committee and state what the Committee already knew—premiums are higher and out-of-pocket expenses are higher as well. I watched as several inflated their cases so they became unbelievable, to the point, one Committee member was online to try to prove what the person was saying was accurate only to find out, it was not. That did not look good for us. One person had great difficulty navigating the steps and stated they were unable to walk. In the next breath, that same person told the Committee that TRS and the Legislature itself did not allow retired individuals to substitute. I personally meet many retired teachers who substitute. Both the Committee Chair and the TRS spokesperson stated that was not accurate. A few of those called to testify gave inaccurate numbers which were easily either unbelievable or proved inaccurate when Committee members fact-checked them during the hearing. Those people did not serve us well. I assume, they assume the Committee members are ignorant. That is not the case. They all knew what they were talking about and could pull up the Internet to prove/disprove stats instantly.