The Texas legislature passed HB 3343 in 2001 establishing a special risk pool for Texas school districts called TRS ActiveCare .
The pool was established in 2001 for the purpose of providing health insurance for employees of participating districts.
There are 1,257 Texas school districts that are eligible to join the program. Currently, approximately 87% have elected to join the TRS ActiveCare program, insuring over 398,000 Texans and their families.
Since the program originated, premium rates have remained stable, with minimal or no rate increases over the past 8 years. The economies of scale, and the bargaining power of large numbers, can be attributed to outstanding underwriting results.
The TRS ActiveCare program is a self-funded trust, with operating costs well below industry average. Gone are agent commissions (usually 5% or more), stop loss premiums (stop loss insurance not needed on such a large group), and other costs normally associated with a group medical plan like the current program at the Brownsville Independent School District.
Several years ago we were hired by the Robstown Independent School District to review, and make recommendations on their self-funded group medical plan. There were striking similarities between Robstown ISD and Brownsville ISD.
The Robstown Board of Trustees was split with neither side seeing eye to eye on issues before them. Politics had a paralyzing effect on the district. Their self-funded health plan was on a path to total destruction. Poor management and spiriling claims coupled with poor advice and guidance was leading the district to financial ruin.
We recommended that the district discontinue their self-funded program and join the TRS ActiveCare plan. We advised them that a move to the TRS ActiveCare “safe harbor” would benefit the district in more ways than one. Costs would become budgetable, benefits would be essentially the same or better, and politics would be removed completely.
A move to TRS, we explained, would leave the district to do what they did best, educate the children without the distraction, politics and financial hazards associated with their self-funded health plan.
Robstown Independent School District joined the TRS ActiveCare Plan. That was an appropriate move for them.
It may be beneficial for the Brownsville Independent School District to consider the same move. Other districts of similar size have opted to do so, including Dallas ISD, Ft. Worth ISD, Lewisville ISD, Richardson ISD, Spring Branch ISD, Victoria ISD, El Paso ISD and many others.
A quick calculation of the TRS ActiveCare premiums, applied to current enrollment at the BISD, indicates an annual savings of over $17,000,000.00 (+$17 million). This is a significant savings in our opinion.
Gone would be agent commissions, PPO network disputes, potential costly lawsuits, expensive consulting fees, stop loss claim issues (lasering, etc), need to bid every year, insurance committee, political in-fighting among board members, administration, insurance committee, legal fees, Open Record Requests, and teacher uniions.
But the hurdles before the BISD Board of Trustees to make the move to TRS ActiveCare are enormous. Too many vested interests are in play. The $50,000,000 BISD self-funded honey pot would be jeopardized. Teacher unions would be against the move – they would lose influence over benefit decisions and provide less value to their members. Local medical providers may protest as well – they may have less bargaining power with a giant like Blue Cross which administers the TRS plan. Less bargaining power usually equates to less income. Insurance agents would protest too. And, insurance consultants would probably advise against such a move – after all, a client that moves to the TRS plan would have no further need for an insurance consultant.
So our question to the BISD is – has the district ever considered a move to the TRS ActiveCare plan? Has an evaluation of the potential merits of joining TRS ever been performed? If so, what were the results?
We think that it may be time for the Brownsville Independent School District to join the TRS ActiveCare plan.
7 comments:
There is strength in numbers. This is a "no-brainer".
The only problem is - once you are in, you are in and you can't get out. You lose all control of your medical plan. True, the rate increases have been low (suspiciously low) for this plan but who's to say they won't explode at some point in the future. Then guess what, you have no alternative other than to pay whatever they tell you to....cause you can't get out of it.
This is a sham. Don't fall for it.
I know
No matter which system is initiated to reduce corruption, the BISD Trustees will find a way to put money in their pockets, the pockets of friends and take hundreds of thousands of dollars in trips and travel from the taxpayer...in the name of "good management". What crap. Our locally elected officials mis-use tax dollars and disregard good education. Our kids graduate illiterate in two languages, without skills, and move on to remediation at UTB...why because the administration is controlled by TEA...unions, and the teachers seem mostly interested in their pay and summer vacation and resist new ideas in education. Our education system is a dinasaur....relic of the past agrarian economy....and has not yet turned the page to meet the needs of the 21st Century. Why should special favors, corruption in insurance be any different.
It would not be cheaper for the employees and the state could and has raised the rates several times. BISD has had the same rates for years. Also it is unlikely that the cost for all employees would be paid by the district. As said before Mr. Rusteberg the writer of the mentioned blog can't get his fingers into the pie. Sour grapes for sure are in play here. The self insured plan is in the black and until it is otherwise a change to TRS would not be a good idea.
The problem with insurance jargon is that the majority of us do not know what the h... they are talking about when they try to explain insurance issues. Sorry to say that most of those who are on the board know little about it either. Why did it take so long to figure out that HealthSmart was sticking it to us and charging us more than they should. Where were the audits? Where was Fuller? Where was the board member in charge of the insurance committee and where was the insurance committee? See what I mean? Todos somos una bola de sonsos tocante insurance!
By any standard, BISD insurance has always been a bad joke. Add graft to mediocre benefits and soaring deductibles, and it isn't hard to figure out why people want something better. In the national disaster bound to result from Obamacare, we need a safe port.
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