Most of the retirees who left were 65 or older and opted to choose cheaper Medicare plans elsewhere, putting the
In previous years, the number of retirees who dropped out of the system has been about 1,500 or less per year.
The system expects a
"We need to find some sustainable revenue streams and not continually be looking at how do we alter our eligibility and our benefits packages to what I think is ultimately at the detriment of our retired teachers," state Rep.
To stave off a
After retirees complained to lawmakers about the higher costs later that summer, the Legislature during a special session added an additional
"The average per-retiree contribution rates to care increased by nearly 50 percent in 2018. That was a shock to the system for many of them and proved to be very expensive,"
Retired teachers:
Why did costs grow?
The Teacher Retirement System board will consider at the end of the month increasing premiums by
This comes after Lt. Gov.
Last session, system officials estimated the shortfall for the 2020-21 biennium to be closer to
Even so, teacher groups told lawmakers Wednesday the state needs more sustainable funding options.
Currently, TRS-Care is funded largely by contributions from the state, current and retired teachers and school districts based on total salaries paid to active teachers. Growth in teacher salaries hasn't kept up with the cost of health care for retirees -- 3 percent versus 7.5 percent, according to Guthrie -- contributing to the system's budget shortfall.
A third of the system was funded by the state during the current budget cycle and 40 percent by current and retired teachers.
Teacher groups have asked the Legislature to base funding on the actual cost of health care, not teacher salaries, and allocate extra money through the rainy day fund. One idea is to aggressively invest some portion of the rainy day fund, which acts like the state's savings account, and use the returns to help fund TRS-Care.
Guthrie laid out possible funding changes, including raising the level of contributions from current and retired teachers, districts and the state.
Whatever the Legislature chooses to do, it shouldn't require current and retired teachers to increase their contributions, said
Retired teachers already have a hard time affording health insurance because the state hasn't increased pensions in at least a decade, teacher groups have said. The state also hasn't increased its
"Those populations both have had flat salaries and flat retirement benefits and extremely high medical health insurance costs that are reducing their take-home pay," Fickel said.
READ: As teacher health costs rise,
Why are retired teachers leaving?
Agents with other insurance companies see the disenchantment and offer more desirable plans, he said.
"They are being bombarded by information as to staying in TRS-Care or leaving or buying an individual plan," Lee said. "These are very confusing times for members."
Currently, once retirees over age 65 opt out, they can't buy health insurance from the system again.
"To not let folks back into the system ... is frankly against every free-market principle that a large majority of the legislators who make up this body have run on in the past," Exter said.
Exter also suggested that the retirement system expand its list of free or low-cost prescription drugs for retirees.
Teacher groups have feared that if too many retirees, especially those who are healthy, opt out of TRS-Care, its unfunded liability will continue to balloon, which could translate into even higher costs for those retirees remaining in the system.
State Rep.
"It seems to me that if you can't afford it, that does indirectly affect the quality of the care that you get," Giddings said.
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