TRS ActiveCare deterioration documented—more fuel for the fire of educator discontent

Public-school teachers are fed up not only because their pay has fallen behind the earnings of comparable workers in other sectors by more than 20 percent, but also because their benefits are getting worse. As economist Paul Krugman has observed, “teachers are having to pay a rising share of their health-insurance premiums, a severe burden when their real earnings are declining at the same time.” (Perhaps needless to say, lower-paid school employees are being hit even harder by the run-up in health-care costs.) Krugman notes the teacher uprisings occurring in states across the nation and says “the people we count on to prepare our children for the future…are starting to feel like members of the working poor, unable to make ends meet unless they take second jobs. And they can’t take it anymore.”

For fresh evidence of the downward trend that has educators up in arms, consider what’s happening to health care for current school employees in Texas.

At their April 20 meeting, TRS trustees adopted premiums and benefits for ActiveCare plans that will apply beginning September 1, 2018, for the 2018-19 school year. The TRS-ActiveCare program is funded entirely through premiums—including the minimal $75 per month state assistance set in 2001 and the $150 or greater per month from employing school districts. In the face of rising costs, therefore, trustees had the option of increasing premiums, cutting benefits, or some combination of each. The changes adopted represent an average premium increase over all plans of about 5.7 percent and a benefit reduction that represents an amount approximately equal to 1.4 percent of current premiums.

Premiums were hiked 4.4 percent for ActiveCare 1-HD, the lowest-benefit plan—from $16 more per month for employee-only coverage up to $58 more per month for employee and family coverage. The effect on a particular employee’s wallet will depend on how much of that increase might be shared by the employing district, but with no district increase the real impact on the employee will be as much as a 12.7 percent jump. In addition, annual individual and family deductible amounts for AC 1-HD increased by 10 percent—from $2,500 and $5,000 to $2,750 and $5,500.

ActiveCare Select premiums went up 5.0 percent—$26 to $79 more per month depending on coverage. The full impact on employee take home pay could be as much as a 9 percent reduction.

ActiveCare 2 premiums went up 9.5 percent—$68 to $190 more per month depending on coverage. The full impact on employee take home pay could be as much as a 14 percent reduction. Further, the AC 2 plan will be closed to new entrants—those currently in that plan will be allowed to keep it, but no new participants may choose AC 2. Given the history of this plan and the now discontinued AC 3, it seems likely that AC 2 will be proposed for complete shutdown as soon as next year.

Notable ActiveCare program features

  • Self-funded health-care program paid for entirely from participant premiums
  • State premium and required minimum district premium sharing assistance unchanged in 16 years
  • Three state-wide PPO options and three regional HMO options from which participants can choose annually

PPO Premium Summary

Plan Participants Revenue

Required

Premium

Increase

AC 1-HD 257,044 4.4%
AC Select 109,953 5.0%
AC 2 71,693 9.5%
Total 439,690 7.1% 5.7%

PPO Premium Detail

Gross Net
Plan Coverage 2018 2019 Change 2018 2019 Change
AC 1-HD Employee $351 $367 $16 4.6% $126 $142 $16 12.7%
+ spouse $991 $1,035 $44 4.4% $766 $810 $44 5.7%
+ child $671 $701 $30 4.5% $446 $476 $30 6.7%
+ family $1,316 $1,374 $58 4.4% $1,091 $1,149 $58 5.3%
AC Select Employee $514 $540 $26 5.1% $289 $315 $26 9.0%
+ spouse $1,264 $1,327 $63 5.0% $1,039 $1,102 $63 6.1%
+ child $834 $876 $42 5.0% $609 $651 $42 6.9%
+ family $1,589 $1,668 $79 5.0% $1,364 $1,443 $79 5.8%
AC 2 Employee $714 $782 $68 9.5% $489 $557 $68 13.9%
+ spouse $1,694 $1,855 $161 9.5% $1,469 $1,630 $161 11.0%
+ child $1,062 $1,163 $101 9.5% $837 $938 $101 12.1%
+ family $2,004 $2,194 $190 9.5% $1,779 $1,969 $190 10.7%

PPO Benefits

Plan Changes
AC 1-HD Individual & family deductibles raised 10%; Individual & family out-of-pocket maximums raised; Increased copays for non-preferred drugs
AC Select Individual & family out-of-pocket maximums raised; Higher specialist & ER copays; New lab copays
AC 2 Individual & family out-of-pocket maximums raised; Higher specialist & ER copays; New lab copays; Increased copays for non-preferred & specialty drugs

ActiveCare 2 closed to new entrants (and likely to be shut down next year).

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