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Another Blow To TRS-Care: Retired Teachers Are Leaving The System In Droves

Facing increased premiums and less coverage, retired teachers are opting out of the health insurance program provided for them by the state

Earlier this year there were fears that the 32-year old health care system that covers hundreds of thousands of retired teachers was approaching a death spiral. The Teacher’s Retirement System’s TRS-Care was expected to experience a shortfall in excess of $1 billion.

Lawmakers came to the rescue with an infusion of cash – a temporary patch intended to shrink the system’s deficit to $700 million. But now, the Austin American-Statesman reports on another threat to the program – retired teachers are leaving it in droves.

Statesman Reporter Julie Chang says some 7,800 retired teachers have requested to withdraw from the program’s health insurance coverage. She says more participants leaving could increase health care costs for those who remain, because fewer members would be sharing the cost of health insurance.

“Because TRS has such a high unfunded liability, the Texas Legislature, through TRS, has had to make some difficult financial decisions, including making plans that are not as attractive to retired teachers anymore,” Chang says.

Chang spoke with a retired Austin teacher whose health premium has gone up 31 percent, to $271 per month. The teacher’s pension of $2,200 per month makes absorbing the increase difficult, Chang says. That’s why the teacher, and others, have sought insurance on the open market.

Chang says the situation at TRS-Care is worrying, but that the system is unlikely to collapse anytime soon because legislators are likely to step in to make up the shortfall.

“But that’s not to say that in subsequent years, there couldn’t be changes to their health care plans in order to save the state some money,” Chang says.

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