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With retired teachers' health care at stake, legislators clash on fixes

The House and the Senate are figuring out whether they can compromise on exactly how to put $212 million into an underfunded health insurance program for retired teachers. Teachers say they'll take their frustration to the polls.

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When David Hatcher got a blood test at his oncologist's office two summers ago, the doctor spelled out his results decisively: “The bad news is you’ve got leukemia. The good news: It’s the kind we can treat with a pill.”

A retired public school history teacher, Hatcher might soon be unable to afford the tablets that keep his chronic myeloid leukemia in check — his health care costs are set to rise, whether or not the Texas Legislature can agree in the next two weeks on a temporary fix for the retired teachers’ health insurance plan.

"After working for 31 years for the state of Texas, being very successful at teaching kids and giving all my time to kids, I'm going to be rewarded ... with them taking basically 25 percent or more of my [monthly pension payment] from me just to pay health care," he said. "That to me is a travesty."

As of Tuesday afternoon, the House and the Senate had each voted out bills that would put $212 million into the Teacher Retirement System to make the TRS-CARE health insurance more affordable for retired teachers over the next two years, lowering their deductibles and premiums. The one-time influx of money would temporarily bolster a state-run program that has been faltering for years, with the state keeping base funding stagnant despite the rising costs of health care.

Legislators are considering a long list of education issues this special session — including school finance reform and "private school choice" — but many have said providing relief for these retirees is among the most pressing.

The problem: The chambers want to take the $212 million from different places in the budget and so far have been unwilling to compromise during the July-August special session. The House wants to take millions from the state's emergency savings, while the Senate wants to employ an accounting maneuver in another part of the budget and make up the difference later.

Another problem: For the retired teachers like Hatcher, who need insurance to cover expensive medicine, even $212 million isn't enough.

And teachers say they'll take their anger with them to the polls for the March primaries.

Legislators are considering the $212 million patch to fix a problem they created during the regular session. Back in the spring, they increased funding for TRS-CARE by $483 million over the next two years. But they also changed the structure of the program to dial back benefits, in order to keep the system running, leading to higher deductibles and out-of-pocket costs, especially for retired teachers younger than 65. Those changes go into effect in January 2018.

"A lot of retirees knew those were coming, but a lot of them did not," said Brian Guthrie, executive director of the Teacher Retirement System, which broke the news to the teachers as the regular session concluded in May. Many were surprised to find out they would have fewer options and less extensive benefit packages.

Hatcher, 63, found out in June that he would soon have to pay 10 times his current deductible before his insurance would pay any portion of his medical care costs. He might have to spend more than $600 on his leukemia medication each month, up from around $30 to $65. No fix the Legislature is seriously considering this month would significantly reduce the cost of his pills.

"We gotta use some common sense here. It's quite obvious that a person cannot pay that kind of money for their medicine," he said.

A staunch Republican, Hatcher was one of thousands of current and retired teachers who called their state representatives, explaining the effects the changes would have on them — prompting legislators to file bills to help them in the special session. Gov. Greg Abbott then put the issue on his list of priorities for the 30 days.

Hatcher's state representative, Charlie Geren, a Fort Worth Republican, joined 129 other House members Tuesday in voting to take $212.7 million from the state's Rainy Day Fund, an emergency savings account, to put toward temporary relief for retired teachers. 

The Senate voted to put $212 million into the health insurance plan, instead using an accounting maneuver to borrow money intended to pay health care companies that provide Medicaid, and make it up in a later payment.

Sen. Jane Nelson, R-Flower Mound, who wrote her chamber's bill, called the House's method of dipping into emergency cash a "false promise" for long-term relief. Rep. Trent Ashby, R-Lufkin, author of the House's version, likened the Senate's method to charging hundreds of millions on a state credit card, not a "fiscally prudent thing to do."

Many retirees, like Hatcher, would still fall through the cracks and get little to no relief. But both plans would cut deductibles in half and reduce premiums for some retirees.

Now the House and Senate have to figure out a compromise, or end up doing nothing for more than 1 million current and retired teachers who make up a strong voting bloc.

"If things go poorly and they feel like they can't afford to live, they're probably going to be more conscientious about who they're voting for," said Tim Lee, executive director of the Texas Retired Teachers Association, which lobbies for the retirees. He has testified before House and Senate committees in the past few weeks begging them to put aside their differences to fund the legislation. "Whatever the Legislature doesn't push forward as additional funding is going to be paid for out of the pockets of retired teachers," he said.

New Braunfels ISD educator Stephanie Quinn, 39, comes from a family of teachers and strong Republicans. For the first time this year, she is considering voting for state leaders not based on whether they are Republican, but based on whether they support teachers — even if it means voting for a Democrat.

She started a petition last Saturday demanding Abbott and state elected officials make state health care affordable for both current and retired teachers. By Wednesday evening, it had received more than 50,000 signatures. 

"If this movement keeps growing the way it is, it could definitely affect the way people vote in March," she said.

Quinn's mother, Debbie Coleman, 63, retired in June after teaching for 35 years. When she first decided to retire, she chose a plan where she would pay just $400 before her insurance started to cover her medical costs. Now, just months later, she's expecting that amount to balloon to about $3,000, or $1,500 if legislators figure out a compromise.

"When I first started looking into [retirement], it looked like a much safer situation than it is now," Coleman said. She was a Democrat as a young woman and switched to the Republican Party when she got older. "We have to look at our futures. You have to be loyal to your family and sometimes not loyal to the party."

Experts and advocates say the shortfall in the health care program will continue to increase, unless the state creates a funding structure to pay for a higher percentage of health care costs as they rise each year.

"We were clear and upfront with the Legislature that even the changes they made this session, although welcome, would not be a long-term fix," said Guthrie said. Over the next four years, legislators will see a TRS-CARE funding gap of $300 million to $500 million, meaning retired teachers could be facing the exact same fight.

Disclosure: The Texas Retired Teachers Association has been a financial supporter of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

This article originally appeared in The Texas Tribune at https://www.texastribune.org/2017/08/03/retired-teachers-health-care-stake-legislators-clash-fixes/.

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