Naked City

The Legislative Budget Board took no action Monday on patching up the holes in the leaking teachers' health insurance boat, despite a request from Gov. Rick Perry, jawboning from Lt. Gov. David Dewhurst, and amplifying decibels from state teachers' organizations. At current issue is the Teachers Retirement System's arrangement with insurance giant Aetna to "administer" the "health reimbursement arrangements," at a cost of somewhere between $2.50 to $3.50 a month, or $30 to $42 a year. That might not sound like much – except that it's an 8% bite on faculty and staff health insurance stipends that were already slashed from $1,000 to $500 (or less for part-timers or administrators) – and the TRS is also saying it might not be able to guarantee more than $450 (or less), anyway.

To add insult to injury, since most teachers will direct that the stipend help pay their insurance premiums, Aetna's fees (amounting to somewhere between $18 million and $20 million) will result from a "virtual" transaction that costs the company nothing – but delivers it a bonus of medical information on 500,000 active Texas teachers, a gold mine for the company's marketing department. "The more you look into it, the better this deal looks for Aetna," says Texas Federation of Teachers President John Cole, "and the worse it looks for teachers."

The piddling HRAs are all that's left of a once-ambitious health care reimbursement program sponsored by Rep. Dianne Delisi, R-Temple, as well as the leftovers of the direct $1,000 insurance stipend created by the 2001 Legislature and slashed in half (or more) by their 2003 successors. The insurance stipend went directly to teachers, who could use it for health care or similar expenses (like child care or IRAs); the HRAs are reimbursement accounts, in theory tax-free – but according to Cole, even Delisi balked at the size of Aetna's cut and is lobbying to terminate the contract. (Delisi was out of town and unavailable for comment.)

Perry requested that the LBB find $18 million in unspecified state money to cover Aetna's administrative fees (whence $2 million has apparently already disappeared), and Dewhurst responded that the TRS itself should just pick up the tab. Teachers' groups pointed out that this would simply mean they would pay on the back end instead of up front. TFT's Cole, accompanied by Louis Malfaro of Education Austin and Austin Sen. Gonzalo Barrientos and Rep. Elliott Naishtat, asked reporters why the taxpayers should pay anything at all for a contract that benefits only Aetna and amounts to "corporate welfare." "The LBB has the ability to terminate this contract," said Cole. "And if they won't do it, we're asking Aetna to walk away from it."

Added Bill Arteaga, an AISD bus driver who represents classified staff for Education Austin, "Most of our members make less than $20,000 a year, and many are single parents who are barely making ends meet now. To ask them to pay these fees out of their own pockets on money that's supposed to be theirs – to me, that's low-down and dirty."

If the state takes no action, school districts – who will do most of the actual "administration" of the health care accounts – will begin deducting Aetna's fees from staff checks beginning Sept. 1.