Changes Coming in TRS-Care Health-Plan Options for Retired School Employees

Under HB 3976 as passed last month by the Texas Legislature, significant changes will occur next year in the health-care options available to TRS retirees. The governor has not yet acted on HB 3976, but on June 2 the Teacher Retirement System of Texas trustees went ahead and adopted new premium rates and benefits for the retiree health-care programs that they administer, along with the active employee programs that we described in the June 2 Hotline.

Not only have premiums and benefits changed for retirees, but also the basic structure of TRS-Care has changed significantly—from many dozens of combinations of plans and plan variants and premium amounts available to almost all retirees to what are essentially two major plans and one plan for a small group of retirees. These three plans are not open options but rather each is a single plan available to a distinct category of participants based on age, Medicare eligibility, and—in very limited circumstances—provider availability.

The first thing to know is that none of the changes will take effect this calendar year. The current array of program options will continue through the end of calendar year 2017, in effect extending the current plan year to 16 months. Deductible and out-of-pocket maximum accumulation under the current program will not restart in September but will continue through to December 31, 2017. After this extended plan year, the new program will begin January 1, 2018. The changes in TRS-Care will affect every current and future retiree; there is no grandfather provision. In short:

·      Current TRS-Care plans continue as is through December 31, 2017.

·      New TRS-Care structure starts January 1, 2018.

·      No grandfathering. All retirees are affected.

High-Deductible Plan for Retirees Under 65

The “TRS-Care Standard Plan” is a high-deductible health-coverage plan available for retirees who are younger than 65 years old and therefore not yet eligible for Medicare. A TRS retiree under 65 years old—whether participating in this Standard Plan or not—will have a one-time option on reaching 65 to enroll in the richer plan for Medicare-eligible retirees.

The so-called Standard Plan for under-65 retirees will offer only one limited benefit before the deductible is met—zero-cost generic maintenance medications, from a list that is still being worked out. All other medical and pharmaceutical expenses will be paid 100 percent by the participant and will accumulate toward a $3,000 individual in-network deductible and $6,000 family in-network deductible. Once the deductible has been met, in-network expenses are paid 80 percent by the plan and 20 percent by the participant. When a $7,150 individual in-network or $14,300 family in-network out-of-pocket maximum is reached, the plan will pay 100 percent of in-network expenses.

The state budget for the upcoming biennium (fiscal years 2018 and 2019) includes funding to help reduce significantly the premium for all Standard Plan participants, and HB 3976 was passed with an added expectation of a reduction in fiscal years 2020 and 2021 as well. However, that assistance is planned to decrease over time, so that each year participating retirees will pay more of the current premium, and the assistance disappears after four years. In 2018, that assistance is estimated to be worth close to $200 per month. Further, over that same four-year period, disability retirees in the Standard Plan will pay no premium for themselves if they began their disability pension on or before January 1, 2017.

TRS-Care Standard Plan Benefits
(for participants not age-eligible for Medicare)

In-Network Out-of-Network
Cost Sharing Before

Deductible Reached

Plan 0% / Retiree 100% Plan 0% / Retiree 100%
Deductible $3,000 individual / $6,000 family $6,000 individual / $12,000 family
Cost Sharing After

Deductible Reached

Plan 80% / Retiree 20% Plan 60% / Retiree 40%
Max Out-of-Pocket Limit $7,150 individual / $14,300 family $14,300 individual / $28,600 family
Cost Sharing After

Max Limit Reached

Plan 100% / Retiree 0% Plan 100% / Retiree 0%

 

TRS-Care Standard Plan Monthly Premiums
(for participants not age-eligible for Medicare)

Covered Regular Premium Disability Retiree Premium
Employee or surviving spouse only $200 $0
Employee and spouse $739 $539
Employee and children $433 $233
Employee and family $1,074 $874
Surviving children $233 $233

 

Medicare Advantage Plan for Almost All Retirees 65 and Older

The new plan for TRS retirees who are at least 65 years old is roughly equivalent to current TRS-Care 2. Current TRS-Care 3 participants therefore will probably see some benefit reduction. Access to providers, however, should not change significantly for most retirees. Even the approximately 40 percent of TRS-Care participants who had not previously chosen the Medicare Advantage Plan are likely to find that they can continue to work with many of their current providers. This is because the TRS Medicare Advantage Plan will pay benefits for any provider who participates in Medicare, and providers need not be in the plan administrator’s network. This plan also provides a pharmaceutical benefit through Medicare Part D.

TRS-Care Medicare Advantage and Medicare Part D Plan Benefits
(for almost all most Medicare-eligible retirees)

Cost Sharing Before

Deductible Reached

Plan 0% / Retiree 100%
Deductible $500 individual
Cost Sharing After

Deductible Reached

Plan 95% / Retiree 5%
Max Out-of-Pocket Limit $3,500 individual
Cost Sharing After

Max Limit Reached

Plan 100% / Retiree 0%

 

Copay
In-patient Hospital (per stay) $500
Out-patient Hospital (per visit) $250
Emergency Room $65
Urgent Care $35
Preventive Care $0
Primary Care Office Visit $5
Specialist Office Visit $10

 

Copay
Retail
Pharmacy
Generic $5
Preferred Brand $25
Non-Preferred Brand $50
Specialty $50
Mail-Order
Pharmacy
Generic $15
Preferred Brand $70
Non-Preferred Brand $125
Specialty $125

 

TRS-Care Medicare Advantage (with Medicare Part D) Plan Premiums
(for almost all Medicare-eligible retirees)

Covered Premium
Employee or surviving spouse only $146
Employee and spouse $590
Employee and children $504
Employee and family $1,106
Surviving children $233

 

TRS-Care Alternative Medical Plan for Some Retirees 65 and Older

A small number of retirees who are age-eligible for Medicare but for whom the TRS-Care Medicare Advantage Plan would present a significant hardship will have an alternative with benefits lower than, but still comparable to, the TRS-Care Medicare Advantage Plan and with comparable premiums. The TRS-Care Alternative Medical Plan is for two groups of retirees: (a) those who did not pay into Medicare while working and for whom the Part A or Part B late- enrollment penalties would be prohibitively expensive; and (b) those who live in remote areas without access to necessary Medicare-participating providers. It’s expected that those in the Alternative Medical Plan will be a very small number (in the hundreds).

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