Updated Jan. 25 12:10 p.m.

If the Texas Legislature declines to take action this session, the Teacher Retirement System of Texas may have to shut down the TRS Care Trust Fund, which provides medical care to about a quarter of a million retired teachers in the state.

In the previous legislative session, the TRS Care Trust Fund faced a shortfall, and the Legislature allocated roughly $768 million to fill in the missing funds. Over the past two years, the situation has only worsened. TRS is requesting an additional $1.35 billion this time around, according to a Legislative Budget Board report.

Sen. Joan Huffman, R-Houston, has worked on interim efforts to analyze the issue. She said it is unlikely the Legislature will fund the full $1.35 billion to the retirement fund.

Sen. Lois Kolkhorst, R-Brenham, questioned whether the 2015 money came with any structural changes to the program to prevent future problems.

TRS Executive Director Brian Guthrie said no fundamental changes were made at the time of the injection of money, although TRS did adjust out-of-pocket expenses and deductibles.

"It was basically funding us to zero," he said. "We felt compelled this time to make [structural] changes because we wanted to make sure we had a positive balance by the end of this biennium so we didn't have another supplemental payment."

Guthrie said the increasing number of retirees and the rising cost of health care is presenting challenges to fixing TRS' budget problems.

Kolkhorst agreed the cost of health care is driving costs of all health-related items upward.

Guthrie said without any influx of state money this session, TRS would have to drastically raise all premiums for the quarter of a million enrolled in the TRS Care program.

"We're talking quadrupling [premiums] or more," Guthrie said.

Guthrie said beyond this, TRS would have to look at shutting down the TRS Care program entirely.

Huffman said the Legislature will have to look at additional solutions in order to remedy this problem.

The Senate Finance Committee recently assigned a workgroup to analyze rising health care costs that are at the root of TRS' budgetary problem.

"We can't do nothing; that's not an option," Chairwoman Sen. Jane Nelson, R-Flower Mound, said.

The full Legislative Budget Board report can be viewed here.

Correction: We incorrectly said half a million teachers were on the TRS Care Plan. Roughly a quarter of the million retired teachers are on the plan. We updated the headline to more accurately reflect the content of the story.