The Texas Teachers Health Insurance Roundup – 2018
This is the latest installment of a series analyzing the health insurance plans offered to employees of the Teacher Retirement System of Texas that I started in 2014.
PRETEND THAT you’re in Vegas, and you walk up to a poker table. “What’s the minimum bet?” you ask the dealer.
“$9,840” comes the reply.
“Wow,” you exclaim. ”That’s a pretty rich hand. How much is in the pot?”
“$2,500,” says the dealer. “You in?”
Now I don’t know a single person who would take that bet. And yet, when it comes to buying health insurance, Americans fall for this kind of chicanery all the time.
Especially the teachers, administrators, school district employees, and everyone else who gets their health insurance benefits through the Teacher Retirement System of Texas (TRS). Many of whom have been for some years now, ripped off.
I don’t mean merely by the fact that their health insurance premiums have gone up like a Mars-bound rocket, either. I also mean by the fact that these fine folks keep getting duped into wasting money on “upgrading” their plans – by their health insurance company; by their employers; and even by their government, in the form of the Teacher Retirement System of Texas.
And it looks like the TRS is on course to do the same to its members again, this coming school year. To show you what I mean, let’s use Dr. W’s Equation to see the numbers from my Vegas example above in action:
(This example contains only the full monthly premium, and does not include any state or local school district subsidies)
As you can see from the chart, a school employee who wants to insure themselves and their spouse can pick between three different plans that I have labeled (from cheapest to most expensive) as “Bronze,” “Silver,” and “Gold” levels. Beginning this year, however, only those who already have the Gold, ActiveCare 2 will be allowed to purchase it again.
That being said, let’s pretend that our lucky couple had an ActiveCare 2 policy last year, and decides that they want to go for the Gold again instead of the Bronze, ActiveCare 1-HD plan. They will end up spending an extra $9,840 (or $22,260 – $12,420) in premiums, just to cut $2,500 (or $5,500 – $3,000) off their all-important deductible.
And by doing so, that couple is accomplishing the exact same thing as putting a $9,840 bet down on a poker hand that only has $2,500 in the pot. A $2,500 gamble that will only pay out if they win, that is. Or perhaps I should say if they lose, because hitting one’s health insurance deductible is no way to win at anything.
But our couple doesn’t stop getting ripped off there, because the Out-of-pocket maximum values for these TRS plans actually go up for the more expensive Silver, and Gold levels. In other words, should our couple experience some medical misfortune and hit their Out-of-pocket maximum during the next year, then they will end up spending an additional fourteen hundred dollars more (that’s $14,700 – $13,300) than they would have, if they had chosen the Bronze, ActiveCare 1-HD plan.
So just like in the previous years that I’ve analyzed these plans, both in sickness and in health seldom does it pay – for Texas school district employees to pay extra for an upgraded TRS health insurance plan.
To understand why take a look at the bottom row of the Dr. W’s Equation chart, and compare the difference between WHAT our couple might spend by going from the Bronze, to the Gold plan: $11,240 (or $36,960 – $25,720).
That’s over eleven thousand extra dollars that our couple had to spend to purchase a plan that supposedly gave them better “coverage,” and that they thought would save them money over the Bronze, Activecare 1-HD plan in case of calamity.
Now I want to be clear, here: while buying the cheaper, Bronze plan may be the best choice for many people, there are instances where upgrading to a Silver, or even Gold plan is advisable. So don’t just place your bets on what Dr. W’s Equation says – think of it more as just a starting point, to get an idea of which plans can save the most money in general. Remember, health insurance companies go to great lengths to make their plans complicated, so it is vital that you carefully examine all of the details and options of the plans you are comparing, so you can make the best choice.
That being said, for most people who don’t have chronic illness or other major health care concerns, the situation is as I describe in my book, The Guide to Buying Health Insurance, and Health Care:
“Thanks to high deductibles you can pay thousands of dollars a year to have health insurance that you’ll never get to use. Or you can pay thousands more, to get the illusion of better “coverage.”
After all, health insurance is just like the other types of insurance that we buy, and should only be “used” to cover things like unexpected catastrophes and major, chronic illnesses that are expensive to treat.
I want to give a huge thanks to all you educators out there who work hard to teach our kids who, once again, are poised to be taken advantage of by this sick system. And it will, unless the teachers and other employees of Texas’ school districts stop handing the TRS so much of their hard-earned money, and learn that when it comes to health insurance – less can be more.
So get busy educating yourselves and your colleagues about the pitfalls of your health insurance benefit plans, because there is a lot of of money to be saved. The example given above does not take into account the state and local school district subsidies that ISD employees receive. These subsidies differ between Texas school districts, so to help you compare your particular district’s health insurance options, you can download the Dr. W’s Equation app for Android (iPhone version coming soon.)
It’s not the COSTS of health care that are outrageous…it’s the CHARGES.