For the 2028-29 biennium, the Teacher Retirement System of Texas is asking the Legislature for an additional $110 million to hold growth of average TRS-ActiveCare premiums below 10% in FY 2028. During TRS’ Legislative Appropriations Request on Sept. 9, Texas 2036 testified in support of this request but also used this moment to bring up a root cause that more funding can’t fix.
The rising price of healthcare itself is what is primarily responsible driving up premiums for teachers, showing up in their paychecks while also considerably eroding the pay raise the Legislature provided last session under the Teacher Retention Allotment.
Francesca Fullen, a classroom teacher from the Austin area who also testified that day, talked about how rising health insurance premiums in TRS-ActiveCare are impacting teachers.
“The reality is that insurance premiums keep rising at rates that far outpace an educator salary, and that kind of incongruity makes longevity in teaching unsustainable.”
Fullen is not just describing an isolated experience. Teach Plus Texas recent report, Teaching Towards Tomorrow, surveyed teachers across the state and reached a similar conclusion. Pay and healthcare “aren’t keeping pace with the cost of living, straining teachers’ long-term career outlook.” As the report puts it, “As healthcare costs continue to rise faster than wages, a larger share of educators’ base salaries is absorbed by insurance expenses, reducing the real value of their compensation and creating a direct threat to teacher sustainability.”
In our recent data request from TRS, we found that since 2012, the average Texas teacher salary has grown about 41%, while the enrollment-weighted average TRS-ActiveCare premium has grown about 80% over the same period, roughly twice the pace of pay.
For Sergio Arjon, another classroom teacher testifying during the hearing, the numbers explain a recruitment problem he sees firsthand. As part of the Teach Plus Texas working group that helped write the report, he has watched the profession struggle to bring in, and hold onto, young teachers.
It is almost impossible to recruit young people to this profession and keep them with these prices.
Arjon shared that the numbers are personal. He watched them play out at home, in his own household.
“She left the profession after teacher benefits seemed unfair to her and is pursuing a career in nursing.
It is the kind of loss the Teach Plus Texas report warns could compound. If these pressures continue, the report cautions, retention could decline most among experienced teachers, the mentors and campus leaders newer teachers rely on, and that would deepen workforce shortages across the state.
What could actually address the root cause?
The state already holds a lever — its large purchasing power. The state’s health plans, TRS and ERS combined, cover more than a million Texans. TRS-ActiveCare alone covers more than 420,000 people. That scale matters because Texas’ hospital and provider markets are consolidated enough in many regions that a handful of systems can set prices with little pushback from any single purchaser.
This type of consolidation and its impact on premiums can be seen directly from Education Service Center Region 15 in San Angelo where the state allowed two hospital systems to merge, severely eliminating competition in the area. According to TRS, this merger contributed to a premium increase of 3.5% for teachers in Region 15. The enormous market power held by providers makes it difficult for some purchasers to push back, but a purchaser the size of TRS can.
Our state’s leverage could shift TRS-ActiveCare toward value-based, market-competitive payment models, which reward high-quality, efficient care instead of simply paying whatever providers charge. It is exactly the kind of leverage Fullen asked lawmakers to consider.
“It is my hope that the Legislature will use that large number of a constituency as leverage to negotiate better rates with healthcare providers…. Even a few hundred dollars makes a difference.”
Closing
Protecting what teachers actually take home will require both the $110 million that holds the line this biennium and a longer-term push to change what TRS-ActiveCare pays for care in the first place. The Legislature has funding and policy options to accomplish both this session.
