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Retiring soon? Plan now for rising health care costs

2014 March 13
by HISD Communications

Recent information from TRS and Texas retiree associations highlights a key issue which may affect retirees in the near future. The health care insurance program that most TRS retirees enroll in, TRS-Care, is rapidly approaching the limits of its current funding plan. 

The program will become insufficiently funded in 2016 if no changes are made to increase funding. The funding issue would continue to worsen in 2017, culminating in a projected $1 billion deficit by the end of that year.

The issue will be discussed during the 84th legislative session in 2015. At that point, the legislature can decide to increase retiree premiums, increase state funding, or raise the deductible/co-insurance amounts. There is a high likelihood that the solution will be a combination of all three. 

Regardless of what actions are taken, retirees should expect to see some sort of increase in premiums and/or increase in out-of-pocket maximums for health insurance.

Currently, the average retiree pays between five and ten percent of their monthly annuity income for health care premiums.  If you are retiring within the next few years, you need to consider the possible significant increase in cost for medical coverage through TRS-Care.

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