Projected unfunded costs for health care fell $828 million or 3.7%, mostly because of the shift, Catherine Terrell, a pension spokeswoman, told Bloomberg. She said about 70% of the plan’s more than 71,000 retirees and dependents have accepted coverage managed by Humana Inc. starting next month.
With the change, the system’s projected unfunded liability for retiree healthcare fell to $21.5 billion as of September from a year earlier, according to a report to the fund’s board Bloomberg reported. Retirees had until December 9 to opt out of the Advantage plan.
The system, which covers about 545,400 members, spent $2.35 billion on healthcare in fiscal 2010, according to the report. The system’s current, self-funded insurance is overseen by Blue Cross Blue Shield of Texas.
Employees and retirees pay nothing for their own coverage currently and that won’t change for benefits under the Medicare Advantage program, the report said. Adding a spouse or child will cost $113 a month under the Humana plan, less than half the cost in the existing program.By comparison, the state’s 1.3 million-member Teacher Retirement System last month forecast a 16% increase in its healthcare deficit, to $28.9 billion, up $3.9 billion in 12 months. The teachers’ system, the biggest public pension in the state, is studying whether to add an Advantage plan, Howard Goldman, a spokesman, told Bloomberg.