ERS Staff Proposal Significantly Increases Cost of State Health Benefits
ERS has released the staff proposal designed to close the projected $140 million deficit in the state’s health plan. The ERS Board of Trustees is scheduled to consider this issue at its May 25 meeting, and ERS has begun a series of Feedback Sessions around the state.
The ERS staff proposal consists of: significant increases in copayments for doctor office visits, prescription drugs, in-patient, out-patient, and emergency room care; a doubling of the annual out-of-pocket maximum participants pay in-network under the 20 percent coinsurance requirement, as well as even larger increases in the annual maximum for out-of-area and out-of-network medical services, and other changes including imposing coinsurance cost sharing for HMO participants. Follow this link to see the ERS document detailing the proposed changes.
ERS has a variety of other information on this topic, including some results of the survey the agency conducted to assess participants’ preferences on potential plan changes and background information on the causes of the projected deficit. This information is available on the news section of the ERS website.
TPEA Seeks More Balanced Solution, Better Data on Impact
The ERS staff proposal seeks to close the projected ERS deficit only by increasing costs on plan participants. TPEA has been working to find a more balanced solution that would include savings through required efficiencies by health care providers, as well as the possibility of the legislature finding additional funds. Legislative leaders are assessing whether there are any funds that could be used to lessen the impact of these changes, but the outcome of this effort is uncertain at this time.
TPEA and a number of legislative leaders also believe that ERS can implement a variety of strategies to lower health care costs and avoid some of the proposed cost increases. ERS has the ability to use selective contracting, tiering of hospitals and other providers, and other strategies to save $40 to $70 million. ERS has stated it could need as much as $800 million in new funding next legislative session to maintain health benefits. Given that the state will face a budget deficit of perhaps $15 billion next session, it is vitally important that ERS begin to implement cost saving strategies now.
ERS has characterized the proposed plan changes as “small increases in fees and slightly increased copays”. Some of the proposed changes are substantial, for instance the doubling of the maximum out-of-pocket from $1000 to $2000 and the 50 percent increase in the copayment for name brand drugs. More troubling, ERS has not released an impact analysis that the shows the cumulative cost impact on participants depending on health status, family size and medical utilization. TPEA is calling on ERS to provide this analysis as soon as possible, so that state employees, retirees and legislators can have a fuller understanding of the real impact of the ERS staff proposal.
Use Feedback Sessions to Voice Your Opinions
ERS has already begun holding Feedback Session around the state to give interested participants a chance to let ERS know how you feel about the proposal. TPEA strongly encourages participation at these events, despite the inconvenient times. TPEA has received numerous complaints about the way the ERS survey was structured, and the feedback sessions provide an opportunity to voice them. Feel free to submit your opinion in writing, but please participate.
The Feedback Sessions will be held from 4 PM to 5:30, or later if participation is high at:
- May 11, Sam Houston State University, Huntsville, TX
- May 12, Dallas County Community College District, Dallas, TX
- May 13, ERS, Austin, TX
- May 13, Webcast (Registration required)
- May 14, Texas Department of Transportation, Houston, TX
- May 18, Texas Department of Transportation, San Antonio, TX
- May 20, Texas Workforce Commission, El Paso, TX
- May 21, Texas Tech University, Lubbock, TX (1-2:30 p.m.)
- May 21, Texas Tech Health Science Center, Lubbock, TX
Follow this link for more detailed information of Feedback Sessions.
Possible Points for Attendees to Make at Feedback Sessions
- The ERS survey was structured in a way that forced participants to choose between limited options, all of which are undesirable. Some employees have suggested that the ERS poll effectively operated like a push poll. ERS should not suggest that survey results endorse or support particular choices. Please emphasize that state employees and retirees don’t want any of the cost increases being proposed by ERS. In particular, ERS did not inquire in the survey about efforts to require health care efficiencies as an alternative to simply raising costs to plan participants.
- ERS has the ability to analyze and project how much the proposed plan changes will cost members and participants. It is unfair for ERS to not provide this impact analysis so that employees, retirees and legislators can gage the full costs and financial impacts on members based on age, health status, family size and other factors. While the average increase in costs for all plan participants may be in the range of $300 to $500 annually, some members will likely see several thousand dollars in higher costs. ERS needs to provide full disclosure on these financial impacts.
- Please let ERS know that you fully support a more balanced approach to resolving the ERS deficit. This approach should require significant cost savings by health care providers. Right now the ERS proposal consists entirely of shifting costs to plan participants and there are no savings from provider efficiencies.
- Many state employees and retirees will not be able to absorb the increased costs they will face under the ERS proposal. There are many retirees and employees who are already living from one paycheck or annuity check to the next. Participants who cannot afford needed medical care or drug treatment may end up costing the plan much more if they fail to treat a condition and it gets worse.
- Please be polite and respectful to the ERS staff and Board members in attendance, they have a difficult job to do.
Watch TPEA’s website www.tpea.org for special event announcements and to read about TPEA’s future schedule.