Organizing against Health Care Cuts

I. THE PROBLEM: Funding cut by Legislature threatens cost hikes for employees, retirees
In the 2009 session of the Texas Legislature, the Texas Legislature cut ERS’ funding request by about 17%. The result is that, without changes, ERS be short about $140 million to pay for medical services next year. The ERS Board of Trustees with decide how to deal with the problem at its meeting on May 25. Current ERS plans are to increase state employee/retiree costs.

II. POSSIBLE SOLUTIONS: Three places to get the money
There are really only three places the needed $148 million could come from:

1. Increase state funding: TSEU believes that the only viable answer is for the Legislative Budget Board to approve an emergency allocation of state funds. The problem was caused by the Legislature in the first place, when they cut the ERS budget request. While “no way” is the stock answer, Texas legislators have always found ways fund issues that they consider urgently needed. There is currently about $8 billion in the “rainy day fund”.

2. Cut provider charges: TSEU has joined in calls for ERS to look hard at possibilities to reduce provider payments in ways that don’t reduce access to services, but ERS has generally done a good job of negotiating with providers, and attempts to cut more could result in providers leaving the ERS network. Already a major hospital in Houston has pulled out of the ERS provider network.

3. Increase costs to employees and retirees: This is the route currently favored by ERS administrators, who have so far not publically asked state leaders for the needed funding. The cost hikes that would be needed to produce the $143 million would be a crushing new burden on active employees and even more so on retirees, who have not had any kind of pension increase since 2001. This route is not just unfair to employees and retirees, it will hurt state agencies and universities, where turnover in many locations is already at levels too high to keep enough qualified staff. This erosion of our health plan will drive away many more employees.

Updated:
ERS proposed employee/retiree cost increases
Doctor office co-pay: increase from $20 to $25.
Specialist office co-pay: increase from $30 to $40
Inpatient co-pay (1st 5 days): increase from $100 per day to $150 per day
Outpatient procedure co-pay: No changes to out-patient
Prescription drugs: increase from $10/$25/$40 to $15/$35/$60
Emergency room: from $100 to $150
New Radiology co-payment (CT scan, MRI, Nuclear Medicine): $100


	Organizing & mobilizing against health care cuts TSEU Organizer contact: Mike Gross

Back to Health Care page	BACKGROUND INFORMATION: How the shortfall happened I. THE PROBLEM: Funding cut by Legislature threatens cost hikes for employees, retirees In the 2009 session of the Texas Legislature, the Texas Legislature cut ERS’ funding request by about 17%. The result is that, without changes, ERS be short about $140 million to pay for medical services next year. The ERS Board of Trustees with decide how to deal with the problem at its meeting on May 25. Current ERS plans are to increase state employee/retiree costs. II. POSSIBLE SOLUTIONS: Three places to get the money There are really only three places the needed $148 million could come from: 1. Increase state funding: TSEU believes that the only viable answer is for the Legislative Budget Board to approve an emergency allocation of state funds. The problem was caused by the Legislature in the first place, when they cut the ERS budget request. While “no way” is the stock answer, Texas legislators have always found ways fund issues that they consider urgently needed. There is currently about $8 billion in the “rainy day fund”. 2. Cut provider charges: TSEU has joined in calls for ERS to look hard at possibilities to reduce provider payments in ways that don’t reduce access to services, but ERS has generally done a good job of negotiating with providers, and attempts to cut more could result in providers leaving the ERS network. Already a major hospital in Houston has pulled out of the ERS provider network. 3. Increase costs to employees and retirees: This is the route currently favored by ERS administrators, who have so far not publically asked state leaders for the needed funding. The cost hikes that would be needed to produce the $143 million would be a crushing new burden on active employees and even more so on retirees, who have not had any kind of pension increase since 2001. This route is not just unfair to employees and retirees, it will hurt state agencies and universities, where turnover in many locations is already at levels too high to keep enough qualified staff. This erosion of our health plan will drive away many more employees. Updated: ERS proposed employee/retiree cost increases Doctor office co-pay: increase from $20 to $25. Specialist office co-pay: increase from $30 to $40 Inpatient co-pay (1st 5 days): increase from $100 per day to $150 per day Outpatient procedure co-pay: No changes to out-patient Prescription drugs: increase from $10/$25/$40 to $15/$35/$60 Emergency room: from $100 to $150 New Radiology co-payment (CT scan, MRI, Nuclear Medicine): $100