Tuesday, May 25, 2010
By Kate Alexander
AMERICAN-STATESMAN STAFF
State retirees to pay more for health care
Retirement system board OKs changes to insurance plan.
The little changes coming to the health insurance benefits for state workers and retirees will make a big difference to people such as Dan Sowards, 62, and his wife.
Higher co-payments for doctors, drugs and hospitals, as well as other out-of-pocket expenses were approved by the board of the Employees Retirement System of Texas on Tuesday as a way to dig the health plan out of a $140 million hole.
It was a painful but necessary move, board members said, to deal with the dual effects of unexpectedly higher health care costs and underfunding from the Legislature that forced ERS to eat through its reserves.
The approved changes, which take effect Sept. 1, reflect the preferences of the 45,000 participants who responded to a survey earlier this year, board members said.
The plan provides health insurance for about 500,000 state retirees and workers and their dependents. For more than 40 percent of the participants, their cost of the health plan amounted to less than $500 last year.
But Sowards, who retired in January after 37 years of working for the state, said retirees are carrying an unfair amount of the burden of these changes.
"It shouldn't be the older adults who have to foot the bill simply because ... they're getting physicals more often," said Sowards, who most recently worked as a food and drug safety officer at the Department of State Health Services.
Sowards estimates that he would have paid $2,300 more last year — a nearly 50 percent increase — for the same services if the higher payments had been in effect.
Absorbing those increases will be difficult for low-wage workers and retirees, who have not received a bump in their pension annuities since 2001, employee and retiree groups told the ERS board Tuesday.
Noting that some state retirees are living in poverty, Caryl Yontz of the Texas Retired Public Employee Council said that "any increase like this — even if it is just $5 — is really going to hurt these people."
But it is highly likely that there will be more increases to come next year.
ERS officials already have told legislators that the health plan will need an additional $880 million in the 2012-13 budget, even with these benefit changes.
As the state faces a budget shortfall of up to $18 billion next year, legislators could ask employees and retirees to dip deeper into their own wallets to pay for health care.
That likelihood loomed large as the board voted 5-1 to approve the changes.
Yolanda Griego, one of the three elected employee representatives on the board, opposed the plan. She said it is time for someone other than state workers to bear the brunt of the state's financial woes.
But Owen Whitworth, another elected member, said the board has a responsibility to ensure that the plan is solvent for the long-term needs of employees and retirees.