Retired Teachers in Illinois: Is TRS Really the Best Option?

The Teachers’ Retirement Insurance Plan (TRIP) in Illinois was a fabulous program until February 1, 2014. Until then, the program always resembled a Medicare Supplement Plan F, which represents no deductibles, no copays, and no coinsurance for all Medicare-approved charges. 

Perhaps what we all took for granted was freedom of choice. Medicare and Medicare Supplements do not have networks, and you can see any provider that accepts Medicare. Our clients loved it, and for good reason!

In 2014, the program changed to only offer a few Medicare Advantage plans. MA plans have deductibles, copays, coinsurance, and most importantly, provider networks. The Teachers Retirement System (TRS) sent out a letter at that time with language like “great news” and “new options.”

Retired teachers were confused and didn’t understand – was this a positive change, or were the benefits they grew to know and love in jeopardy? Our organization exists to serve our senior community, so we’re here to clear up the confusion and help you make an educated, informed choice for your retirement.

Jump ahead at any time:

• What Is TRS?
• Why Did TRS Change Its Medicare Program?
• TRIP and TRAIL – Understanding Your Options As a Retired Teacher
• TRIP/TRAIL vs. Medicare Supplement
• When Is TRAIL the Best Choice?
• What About My Dependent?
• Conclusion

Disclaimer: We are not part of or affiliated with the TRS. Please confirm your TRS plan options and benefits. If you do meet with a Sams/Hockaday, we will ask for more information on the benefits offered to you for a fair comparison of your options. All of the TRAIL benefit information published here is publicly available via Illinois.gov.

What Is TRS?

The Teachers’ Retirement System in Illinois provides retirement, death, and disability benefits for all licensed educators employed in Illinois public schools outside of the City of Chicago. 

Retirement benefits are determined by a formula in state law that includes age, final average salary at retirement, and total creditable service time. At the end of fiscal year 2016, TRS had 406,855 members and processed more than $5.8 billion in benefits (Illinois.gov).

One of the benefits available to retired teachers is TRAIL, or the Total Retiree Advantage Illinois (TRAIL) Program. This is essentially a few Medicare Advantage plans you can choose from. It didn’t used to be that way, though. Prior to February 1, 2014, retired teachers enjoyed a program that resembled a Medicare Supplement Plan F.

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Why Did TRS Change Its Medicare Program?

None of us can say with absolute certainty why TRS decided to change its Medicare program to only offer Medicare Advantage plans. However, we can certainly speculate and make educated guesses.

It’s no secret the state of Illinois is in financial trouble and has been for decades. Illinois hasn’t had a balanced budget since 2001. In 2008 and 2009, Illinois faced spikes in pension contributions, and Gov. Pat Quinn took out more debt to make the 2010 and 2011 budgets balance (IllinoisPolicy.org).

Illinois’ credit rating was downgraded 13 times from 2009 through 2014. By 2010, Illinois had the worst credit rating out of any state in our country.

When we understand this history, it makes sense that the Illinois government would be looking for ways to save money. We suspect the TRIP program got rid of its top-notch coverage and found significant cost savings by switching to a private Medicare Advantage program.

While this may be in the best interest of the state’s budget, that doesn’t mean it’s in the best interest of our state’s teachers. Let’s call teachers what they are – public servants that shape our communities. We know of many teachers who spend their own money on classroom supplies and decorations because they aren’t given enough to make it happen. Teachers deserve better, and we want to make sure you’re doing what’s best for you in retirement.

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TRIP and TRAIL – Understanding Your Options As a Retired Teacher

The State of Illinois offers members of the Teachers' Retirement Insurance Program (TRIP) a healthcare program called Total Retiree Advantage Illinois (TRAIL). In order to join TRIP, you must be receiving a monthly benefit from TRS and have at least eight years of creditable service.

TRAIL provides those who are eligible – and their dependents – health coverage through a Medicare Advantage Prescription Drug (MAPD) plan (Illinois Department of Central Management Services).

This means if you’re a retired teacher enrolled in Medicare Parts A and B, you can choose a Medicare Advantage plan the state offers, which includes drug coverage (Illinois.gov).

All Illinois counties have an HMO, OAP, and TCHP option. 

• HMO: Health Maintenance Organization (HMO) members are required to stay within the health plan provider network. No out of network services are available. Members will need to select a primary care physician (PCP) from a network of participating providers. The PCP will direct all healthcare services and make referrals to specialists and hospitalization. 
• OAP: Open Access Plan (OAP) members will have three tiers of providers from which to choose to obtain services. Tier I offers a managed care network which provides enhanced benefits and operates similar to an HMO. Tier II offers an expanded network of providers and is a hybrid plan operating similar to an HMO and PPO. Tier III covers all providers which are not in the managed care networks of Tiers I or II (out of network providers).
• TCHP: Teachers’ Choice Health Plan (TCHP) members may choose any physician or hospital for medical services; however, members receive enhanced benefits, resulting in lower out of pocket costs, when receiving services from a TCHP in network provider. TCHP has a nationwide network of providers through Aetna PPO.

In Macon County, you have the following choices for the 2021 benefit year:

• Aetna HMO
• BlueAdvantage HMO
• Health Alliance HMO
• HMO Illinois
• Aetna OAP
• HealthLink OAP
• Teachers’ Choice Health Plan (TCHP)

If Medicare is your primary and you choose an HMO or an OAP, your monthly premium is $112.89. Your dependent beneficiary would be $391.07.

A Medicare Advantage Prescription Drug (MAPD) plan through TRAIL isn’t your only option. You have the option to leave TRAIL and utilize your Original Medicare benefits with a Medicare Supplement.

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TRIP/TRAIL vs. Medicare Supplement

Your options with TRAIL are going to be Medicare Advantage plans that have prescription drug coverage built-in. 

To help you understand your options better, we’ve put together a chart showing you three options:

1. The Health Alliance HMO available through TRAIL
2. A Health Alliance HMO offered to anyone on Medicare
3. A Medicare Supplement Plan G (quoting 65-year-old rates)

The premiums are relatively close, but we see four major differences when comparing the Medicare Advantage HMOs to a Medicare Supplement:

1. Networks
2. Out-of-pocket costs
3. Drug coverage
4. Managed care

Networks

First and foremost, networks are always a concern here in Macon County. When you live in a larger city, there are more doctors and hospitals, and the network is less of a hurdle. However, here in Decatur, there are fewer options, and you may discover your favorite doctor is not in your network.

An HMO does not pay for any out-of-network services.

A Medicare Supplement allows you to see any doctor that participates in Medicare, which is over 90% of all doctors in the United States. With a Plan G, you’d have freedom of choice.

Out-of-pocket Costs

Medicare Advantage typically promises low, or even $0 premium in exchange for more out-of-pocket costs when you do utilize the plan. As you can see, the Medicare Advantage options offered for retired teachers are not low or $0 premium – they cost $112.89 per month for 2021.

However, the Medicare Advantage plans offered through TRAIL do have a unique benefit structure with a lower out-of-pocket maximum than other MA plans offered. They also have better coverage for hospitalizations and skilled nursing facility stays. 

While the benefits offered through TRAIL are better than options offered to anyone eligible for Medicare, they simply do not compare to a Medicare Supplement.

Plan G, for example, requires you to pay the Medicare Part B deductible, which is $198 in 2020. After that, all Medicare-approved expenses are covered 100%. You will have no out-of-pocket costs for any medical bills approved by Medicare.

Jerry Birkey’s wife, one of our clients, was diagnosed with cancer in June of 2016. They had a Medicare Supplement. Jerry explains he got bills for hundreds of thousands of dollars but was only responsible for $21.65.

With a Medicare Advantage plan, you have copays and coinsurance, meaning every time you need medical care, you will be paying money out of your own pocket.

Drug Coverage

The prescription drug benefit offered through TRAIL is refreshingly simple to understand, and it offers more robust coverage than the other Health Alliance Medicare HMO Rx 40 plan offered to anyone on Medicare.

TRAIL HMO Drug Coverage

Health Alliance Medicare HMO Rx 40 Drug Coverage

Medicare Supplements do not offer drug coverage, so you will need to purchase a separate Medicare Part D drug plan. The average nationwide monthly premium for a Part D plan is $30. While you do have to purchase a separate drug plan, you have the advantage of choosing one that fits your needs.

You can select the pharmacy you love and select the current drugs you take, and Medicare’s Plan Finder will tell you which plan is best for you at the lowest price available.

In any case, the drug coverage offered through TRAIL looks really great to us, and it could be a lifesaver for those who take a rare, very expensive medication.

Managed Care

Many don’t realize that Medicare Advantage plans are managed care plans. Your insurance plan can override your doctor’s recommendations in the interest of saving money.

For example, Dr. Sams, a board-certified orthopedic surgeon at Decatur Orthopedic Center (DOC), explains he has to go through a lengthy and difficult pre-approval process when a patient has Medicare Advantage.

“I’ll never forget a patient that was told a bunch of misleading things, and when the time came for surgery, their MA plan basically said they hadn’t suffered enough and had to do several more weeks of therapy,” Dr. Sams explains.

Original Medicare is Fee-For-Service, and your supplement fits right alongside that. You don’t need any pre-approvals with a Medicare Supplement. You get the treatment you need when you need it, and the plan pays. It’s as simple as that.

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When Is TRAIL the Best Choice?

We prefer the simplicity and depth-of-coverage Medicare Supplements offer seniors. You get to utilize the Original Medicare benefits you’ve been paying into for years.

While we do recommend a Medicare Supplement to the majority of retired teachers we meet, there are always going to be exceptions.

If you take a rare, very expensive medication, we’d encourage you to stay on TRAIL’s Medicare Advantage plan. As you saw earlier, their drug coverage is very simple and very good. The most you’d ever pay for a drug is a $100 copay. You’re probably not going to find another drug plan out there like it.

The other scenario is if you’re covered through the VA. One of our clients is eligible for 100% coverage through the VA. He kept the TRAIL plan, because he knew if he ran into a scenario where he wasn’t covered, he could always fall back on the VA. He could go to the VA hospital in Jacksonville if the TRIP option left him hanging.

So those are the two most common situations where we’d recommend you stay on TRAIL: you have a very expensive drug or you also get coverage through the VA.

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What About My Dependent?

We don’t recommend your dependent to utilize the TRAIL options. The premium is almost double, and you can buy a Medicare Supplement for a fraction of the price.

We’ve never come across a case where we did not recommend the spouse or dependent to have a Medicare Supplement.

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Conclusion

So many just get used to having the same insurance. I’d encourage you to really take a look at what you’re paying for. Even if you’ve been happy with it in the past, is it still serving you? Are you going to be taken care of if you have a medical concern?

Please reach out to us here at Sams/Hockaday. We’d be happy to compare your current or upcoming TRAIL benefits to that of a Medicare Supplement. You may find TRAIL is the best coverage for you, but there’s a chance we could offer you significant savings while securing more robust coverage.

Make sure you’re doing what’s best for you in retirement!

Disclaimer: We are not part of or affiliated with the TRS. Please confirm your TRS plan options and benefits. If you do meet with a Sams/Hockaday, we will ask for more information on the benefits offered to you for a fair comparison of your options. All of the TRAIL benefit information published here is publicly available via Illinois.gov.