For over 30 years, the state of Texas has provided healthcare to retired teachers through the Teacher Retirement System, or TRS-Care. Medicare and TRS-Care work together to provide benefits for hundreds of thousands of retired teachers and their dependents.
The program’s original funding back in 1985 was enough to maintain the fund through the fiscal year 2000. However, the Texas Legislature is under no continuing obligation to provide benefits. As premiums and deductibles have continued to increase, many retired teachers have begun to leave TRS-Care. They are electing plan options with Medicare instead.
This is expected to continue, especially since premiums for retired teachers are expected to double or even triple in September of 2017. Let’s look at some comparisons of your options.
Coverage for People with Medicare and TRS-Care
Medicare + Medigap provides a comprehensive alternative to Medicare and TRS
Medicare and TRS-Care work together to provide coverage for retirees who are Medicare-eligible. To be eligible for TRS-Care 1, an individual must have worked at least 10 years in the TRS system. Eligibility for TRS-Care 2 or 3 requires must have at least 10 years in the system. You must also be age 62 or older.
TRS is network-oriented and currently use the Aetna network in Texas. TRS offers 5 different healthcare plan options depending on your years of service and your Medicare enrollment status. In 2017, these options fall into two main categories: TRS-Care Standard plans and TRS-Care Medicare Advantage.
TRS-Care Standard Care Plans
In the Texas TRS-Care Standard Plans, the TRS benefits coordinate with Medicare, which will be your primary coverage. Retirees who have both Medicare Part A and B active will pay significantly lower premiums than those with only Part B. For example, a retiree with Part B only would pay approximately $215 – $245 for TRS Care 3 depending on years of service. A retiree with both Part A and B would pay $90 – $110.
Unfortunately, these plans have deductibles ranging from $400 – $3900 per individual, and twice that for families. After Medicare’s payment, TRS pays only 80%. You are responsible for the remainder. This means retirees pay their share in the form of copays and/or coinsurance for doctor visits, lab-work, inpatient stays, urgent care, emergency care, and many other items.
Your medications will be covered separately under one of three different Express Scripts drug plans in 2017. You will be automatically enrolled in one of them if you do not elect an option yourself.
How Medicare + Medigap Compares
Compare this with a retired teacher age 65 in the Dallas/Fort Worth area who has both Part A and Part B and elects Medicare Supplement Plan G. She has a premium of around $110/month.
She can see any doctor or hospital that accepts Medicare, which is an enormous network of nearly 900,000 providers in the U.S. Furthermore, she has a one-time $183 deductible and then she has NO COPAYS WHATSOEVER for doctor visits, lab-work, inpatient stays, urgent care, emergency care, and all other Medicare-covered items.
She can buy a standalone Part D drug plan for as low as $17/month. Pretty easy to see why so many teachers are choosing to leave TRS for Medicare supplemented by Medigap.
TRS-Care Medicare Advantage Plans
TRS also offers two Medicare Advantage options. To be eligible, you must enroll in TRS-Care 2 or 3 and also Medicare Parts A and B. Members have a deductible to meet as well as copays for services as they go along.
For example, members might pay a $5 copay for primary care visits and a $10 copay for specialist visits after they first meet their plan deductible. A hospital stay has a copay of either $250 or $500 per stay, depending on the plan chosen.
For 2017, Humana ensures the TRS-Care Medicare Advantage options. Your doctors must be willing to bill Humana for your care. Otherwise, you will need to pay for your claims and then submit to Humana for reimbursement.
Some teachers have premium-free Part A benefits through other work history or spouses work history
Not all teachers qualify for Part A. Since TRS-Care must then be primary for Part A hospital services, these members pay higher premiums for their TRS-Care coverage. While many teachers have spouses who worked at least 10 years and then, therefore, qualify for Part A coverage through their spouse, there are still many retirees who are single or do not have Part A coverage. This means their costs on the plan are nearly twice that of retirees who do have Part A.
However, Medigap plans are not a viable option for retirees in this scenario because you cannot enroll in a Medigap plan unless you have both Part A and B. This leaves some retirees with TRS-Care standard plans being their only option.
Trading TRS for a Medigap Plan
There are a few things my team looks at when we are assisting someone with TRS-Care who is wanting to review their Medicare options. First, we review how your important prescriptions will be covered. TRS-Care Standard plans do not have a coverage gap or donut hole for prescriptions.
For some people with expensive brand name meds, we might recommend you stay with TRS-Care. However, retirees with few medications or mostly inexpensive medications will find Part D plans to be a very affordable option. They pair this with their Medicare and Medigap plans for great coverage.
We also advise retirees to consider coverage for any dependents. Medicare and Medigap plans only allow coverage for yourself. You cannot carry a dependent on your Medigap plan, although your spouse may qualify for his or her own coverage if they are 65 and older. Should you need to cover a family member on your plan, staying with TRS may make the most sense until your dependent is able to obtain other coverage.
Finally, dropping TRS-Care means you cannot return to it in the future. However, with Medicare and Medigap options being so affordable and comprehensive, this is less of a concern today than it was a few years ago. A quick comparison of Medigap rates in your area against your potential TRS-Care and Medicare costs makes it easy to see which options will give you the lowest out-of-pocket costs.
With continuing budget cuts, it’s likely that we’ll see costs for retired teachers continue to go up. Fortunately, there are affordable options through Medicare which can provide great coverage to individuals for whom it makes sense. It’s important that you carefully review your TRS-Care and Medicare literature provided by the Teacher Retirement System. Get informed so you can make the best decision for yourself.
We also advise working with a broker like Boomer Benefits who can help you compare your TRS-Care costs against what your potential with Medicare and Medigap costs. We’ll make sure that moving to a Medigap plan makes sense for you. If you will be turning 65 soon and enrolling in Part B, you can advantage of your 6-month window to join any Medigap plan without any medical underwriting. If you are over 65 already, we can explain your rights for guaranteed issue when leaving your TRS plan.