Texas Teachers Get SCREWED – Again!
Well, they’re at it again. The Texas Teacher Retirement System (TRS), that is. Because just like last year, and the year before, and the years before that…when it comes to their ActiveCare health insurance policies, it still pays to go for the Bronze.
Now what I mean when I say Bronze is the cheapest health insurance offered by TRS – the ActiveCare 1-HD plan. See, just like Einstein’s equations on the chalkboard above, comparing health insurance plans can get confusing pretty dang quick. So to keep things simple (which ain’t easy), I like to borrow from the ObamaCare marketing team and label health insurance offerings as Bronze, Silver, or Gold.
A year ago when I analyzed TRS health insurance options for school districts around the Dallas/Fort Worth area, I found that in nearly every case the Bronze made the most sense.
So I posed a couple of questions:
Would any single employees wanting to buy insurance only for themselves “spend $3,276 more in premiums, just to take $1,500 off their deductible?” and
Would any Employees who needed to insure themselves and their spouses “pay $6,768 more in premiums, just to take $2,000 off the deductible?”
My guess was yes, because that’s how health insurance is sold – by tricking folks into spending more than they could possibly save. So I predicted that many ISD employees across the state would indeed forego the ActiveCare 1-HD (Bronze) option, and instead buy the more expensive ActiveCare Select (think of this as the Silver) or ActiveCare 2 (go for the Gold!) policies. You know, the ones with the lower deductibles.
Man, if only I was this good at guessing Powerball numbers.
Because as it turns out, I nailed it. According to the April 23, 2016 TRS Joint Committee Report on ActiveCare plans, 53% of the 429,405 participants in the TRS ActiveCare system last year picked either the ActiveCare Select, or ActiveCare 2 plans. And to answer my first question – yes, almost 46,000 single employees did choose the much more expensive Gold over the Bronze.
At $3,276 a pop, that’s an awful lot of wasted money. An unbelievable amount, as we shall see.
I say wasted because in almost every case, the increase in premiums outweighed any potential benefit on the backside.
Now I say “in almost every case” because as I stated last year there are exceptions to every rule, and here I’ll reiterate that there is the occasional situation in which having the prescription coverage offered by an upgraded plan makes more financial sense. But only for those who have rheumatoid arthritis, hepatitis C, or other types of chronic illnesses treated by outrageously priced specialty drugs that cost tens of thousands of dollars a year.
I said occasional though, because the vast majority of people don’t take Enbrel, Remicade, or Harvoni for example, so it just doesn’t pay for these folks to buy a more expensive prescription plan.
Now, let’s get back to what I said at the beginning – if you are a Texas teacher or ISD employee and you plan to get your health insurance through TRS, open enrollment is here now. And if you choose the upgraded ActiveCare Select or ActiveCare 2 option, the chances are you’ll be wasting your money.
Thousands of dollars of, your money. Really.
Don’t believe me? To prove my point let’s take all three of next year’s ActiveCare rates and compare them using Dr. Wacasey’s Equation:
Premium + Out-of-pocket maximum
= What you could spend on health insurance and health care.
– or –
P + O = W
Once again this year I’ll pick on the school district that I graduated from thirty years ago, the Birdville ISD:
I chose the Employee + Spouse option because of all the categories it has the most dramatic price difference between the Bronze (ActiveCare 1-HD) and Gold (ActiveCare 2) plans.
Start by looking at the top line – the deductible. Here’s proof that these things are just marketing tools: at only $3,000 the Gold plan could save you a cool two grand off the crappy Bronze plan’s $5,000 deductible.
But consider how much potentially saving that $2,000 would cost you, by looking at the difference in the Premiums. If you and your spouse go for the Gold next year it will cost you $7,656 more than the Bronze plan. But hey! I mean, you can take $2,000 off your deductible, right?
It gets worse. Go ahead and compare the next line – the Out-of-pocket maximums. Incredibly, at $13,700 the Gold (and Silver) upgrades are actually $600 higher than the Bronze.
Talk about a slap in the face – we pay more for health insurance with the idea being that we will have to pay less if we get sick or injured. But not so with the ActiveCare system, where you’ll not only pay more to stay well, but you’ll also pay more – $600 more – if you get deathly ill.
Now add up the P and the O to get W, or What you might spend in case of a medical catastrophe.
Take a look at the bottom numbers in the chart – the W for the Bronze plan is $20,948. The W for the Gold plan is $29,204. That’s a difference of $8,256. That is, if worse comes to worse sometime during the next year, you and your spouse could save $8,256 by sticking with the cheaper, Bronze-level ActiveCare 1-HD plan.
So much for the concept of “better” health insurance, eh?
The same holds true for the other categories too, all of which have the same exact pattern. For 2016-2017, BISD workers who choose the ActiveCare 2 (Gold) over the ActiveCare 1-HD (Bronze) plan could end up spending:
- $3,948 more for single Employees
- $5,724 more for Employees + Child(ren), or
- $4,992 more for Employees + Family plans
In case they have a catastrophic illness or injury.
So once again it’s blindingly apparent that, when it comes to the TRS ActiveCare health insurance plans, Bronze is best. And at this point I hope that the reader will agree with me when I say that, except for the rare situations discussed above, any extra money paid to upgrade from the ActiveCare 1-HD plan is, well, wasted.
In fact, so much money was wasted last year, it’s shocking. Go grab some popcorn and I’ll show you how much:
Here are the charts I used in the screencast:
Take the number of those in each insured category (Employee, Employee + Spouse, etc.) who upgraded to the Silver and Gold plans, and multiply that by the amount that was spent on the higher premium.
You can see that those who bought the ActiveCare Select (Silver) plans spent a total of $174,411,504 more than their Bronze counterparts, and those who went for the ActiveCare 2 (Gold) plans wasted $490,732,440 doing so. Add those two numbers up and to me at least, it looks like over $665 million dollars was spent on health insurance plans that may have had lower deductibles and co-pays, but little else to offer.
I call this phenomenon spending thousands, to save hundreds.
Texas ISD workers can take comfort in knowing they aren’t alone however. Because as I said earlier this is how health insurance is sold in the U.S. today – through scare tactics and confusion. People want low co-pays and deductibles, and are willing to fork over lots and lots of money to have them.
Being that the TRS system serves public employees, all this funny money has taxpayer implications, too. See, ISD employees don’t pay their whole insurance premium: Texas law says that the state has to cover $75, and each school district has to kick in (at least) an additional $150 toward every employees’ monthly premium. Which means that every one of these insured employees is subsidized by at least $225 a month (or $2,700 a year).
Now these mandated contributions haven’t been changed since the inception of ActiveCare in 2003, so the employees have had their premiums raised each year to foot the bill for the expenses. Which means it’s just a matter of time before someone starts agitating to have the state and local ISD contributions (funded by taxpayers) raised.
Even now many districts are voluntarily doing this by paying much more than required. Last year some districts kicked in $250 or more per month, presumably to attract and keep good employees. But I would remind the reader that that money is funded by the taxpayers, and in many cases is being just handed over to the health insurer.
The ISD employees do have options. Under the Affordable Care Act, adults and their dependents must be covered by a health insurance plan that provides “minimum essential benefits.” And that means…ya don’t have to take what TRS is offering.
Instead, ISD employees can be insured through their spouse, another association, or heck anyone can just buy health insurance elsewhere – through the so-called “health insurance marketplace,” or other online resources. And if one does a little online investigating you can find even cheaper options than TRS available, especially for those insuring their spouses or families. I know, because…I shopped around for about ten minutes and found them myself.
There is one final insult added to all this injury. For the 2016-2017 year, the premiums for the Employee + Spouse option have gone up by $74 a month – or $888 bucks a year – for the ActiveCare 2 Gold plan. The same goes for the Employee + Family option – who will pay $76 bucks extra every month to go for the Gold.
In fact, every one of the ActiveCare (and HMO) rates has gone up this year – except one. Yep, you guessed it. The ActiveCare 1-HD, or good ol’ Bronze plan, which has held steady with no change in the premiums since last year. I don’t know how much clearer I can say it…unless you really investigate and can identify a definite reason to justify otherwise…Bronze is Best.
So to conclude, Texas educators and ISD employees could continue this tradition of being screwed by their Teacher Retirement System health insurance offerings. But will all of my ranting make these ISD employees stop and think before filling out their open enrollment applications?
I sure hope so. Because, given how much was wasted last year on premiums with no promise of any return, ISD employees now have over 650 million reasons to think it over – and maybe even do a little math – this time.
It’s not the COSTS of health care that are outrageous…it’s the CHARGES.