After failing to temper soaring health care costs for retired teachers, state lawmakers are considering giving retired teachers up to $1,200 more a year and pumping $200 million into their health care over the next two years.
Starting in January, many retired teachers, particularly those under the age of 65, will see higher premiums and deductibles grow as much as 10 times what they’re paying now. The Legislature approved the changes during the regular legislative session this year as a part of an effort to deal with a $1 billion hole in the retirement system. Lawmakers ended up partially plugging the hole with $484 million and raising costs for retired teachers.
“We have discovered some outliers where some people in the TRS system are getting hit a little harder than others. The good news about a special session is we can fix it. We don’t have to wait a year and a half,” Lt. Gov. Dan Patrick said on Thursday.
Patrick said he wants Senate legislation filed for the special session that starts Tuesday that would pump an additional $200 million into the Teacher Retirement System of Texas to help address rising premiums and deductibles as well as give retired teachers who had 20 years of teaching experience a $600 yearly bonus starting in March. The bonuses would eventually rise to $1,000.
In the House, Rep. Drew Darby, R-San Angelo, has filed two bills. House Bill 80 would give retired teachers up to $100 more on their monthly retirement check and HB 76 would boost funding to the Teacher Retirement System by $100 million over the next two years.
“Each member of the Legislature (has) been receiving comments from retired teachers from the effects of health care premium increases and their fixed income,” Darby said.
Retired teachers and advocates said that they welcome any relief from their rising premiums and deductibles. But Gov. Greg Abbott has not included the Teacher Retirement System, which faces at least a $200 million shortfall by 2021, as part of the special session agenda.
“It is a good faith effort on their part if the bills pass. But we have been down this road. This game is not over until the ink is dried,” said 67-year-old Ella Wetz, who retired from the Pflugerville school district in 2005. Wetz, along with fellow retiree members of the Texas State Teachers Association, have been calling lawmakers for relief.
Wetz’s deductible is increasing from $300 to $3,000. She suffers from fibromyalgia as well as metal toxicity, which requires an out-of-network specialist. She said that with no increase in her retired teacher annuity and ballooning health care expenses and cost of living, she is looking to sell her Northeast Austin home within the year.
Other retired teachers, most of whom don’t receive Social Security because their school districts didn’t pay into it, have taken on jobs to supplement their monthly retirement checks.
The last pension cost-of-living increase was in 2013 when only teachers who retired prior to Aug. 31, 2004 qualified. Darby’s HB 80 would expand that cost-of-living increase to those who retired on or before August 31, 2015.
“When a person retires that’s all that they get. We take a sort of ad hoc approach to do raises,” said Tim Lee, head of the Texas Retired Teachers Association, adding that more money “for our retirees means that they can more easily afford the things that seniors are having trouble paying for whether it’s medicine or getting around town or just to continue to enjoy a life of retirement.”
None of the legislative proposals would make any structural changes to the health insurance system for retired teachers that advocacy groups say ultimately should happen.
It’s unclear how the $100 million in HB 76 and the Senate’s $200 million extra in the retirement system would be used to drive down health costs for retired teachers. Patrick said that he would like the money to be prioritized for retired teachers with children with disabilities and spouses, and to reduce drug costs.
The state established the retired teacher health care plan in 1986 with enough funding to last through 2000. Since then, the system, which covers 270,000 retirees, has been at risk of going unfunded, requiring legislators nearly every two years to tinker with the system to keep it funded for the short term.
Advocacy groups say that instead of teacher salaries, contributions should be tied to insurance costs, which is more like how the state funds the Employees Retirement System of Texas. But that change would push up costs and so far has not been popular with lawmakers.
What we’ve reported
The American-Statesman reported this month how the Texas Legislature had approved changes to the Teacher Retirement System of Texas that will drive up premiums and deductibles for many of the 270,000 retired teachers by January. The newspaper highlighted the impact of rising health costs on some Central Texas retired teachers, including married couples and those still caring for children with disabilities.