Bill to cut free health insurance for state retirees advances
SPRINGFIELD -- A bill to eliminate a premium-free health insurance perk for state government retirees is on its way to the floor of the Illinois House.
Without a dissenting vote, the House Executive Committee approved Senate Bill 1313, which would require retirees to pay for their state health insurance, regardless of how long they’ve worked for the state.
Retired state workers and university employees now are entitled to premium-free state health insurance if they have 20 or more years of service.
Before it was approved by the committee, the bill was amended to also end the perk for retired judges and lawmakers. Retired lawmakers qualify for free health insurance at age 55 with eight years of service or age 62 with four years of service. Judges with 10 years of service can retire with free health insurance at age 60.
The bill also applies to a handful of members in the Teachers Retirement System. Most retired teachers are part of a separate insurance program, for which they pay premiums. The state also pays a subsidy for that insurance program, although Gov. Pat Quinn wants to end it.
AFSCME: Negotiate deal
House Speaker Michael Madigan, D-Chicago, said he sponsored the bill in part because Quinn asked him to “relative to the current collective bargaining with various unions.”
“In addition, it is part of our budget making,” Madigan said. “It’s a significant cost factor.”
House Minority Leader Tom Cross, R-Oswego, a co-sponsor of the bill, said the state spends $876 million on retiree health insurance. He said 78,000 state retirees pay no premiums for their health insurance, something that costs nearly $7,400 per person.
“The goal is not to eliminate health-care coverage, but to make it sustainable,” Cross said. “If you want to have health-care coverage, I think the reality is people are going to have to pay something for it. You can’t provide it at no cost.”
Madigan said he believes health benefits can be changed without violating the state constitution.
“The language does not apply to the health-care program,” he said. “The health-care program is something we can change at will.”
Madigan also said the changes to the retiree health program can proceed in the General Assembly separately from other pension changes being negotiated this spring.
“There may be others who want to link the two. That’s not my intent,” he said.
The American Federation of State, County and Municipal Employees opposes the bill.
“Health benefits have always been historically and should always be part of an employee compensation package,” said Joanna Webb-Gauvin, legislative director of AFSCME Council 31. “It always has been subject to the collective bargaining process. We view this (bill) as a violation of that collective bargaining process.”
Contract negotiations with the administration should be allowed to play out first, Webb-Gauvin said.
“We believe this bill is intended to interfere with the collective bargaining process. Why else would the governor ask for its introduction?” she said.
AFSCME said 114,000 state and university retirees could lose their health insurance “premium support” under the bill. The union says a typical retiree pays $3,000 a year or more in co-payments and other health insurance costs.
Under the bill, the Department of Central Management Services would determine the level of premium payments retirees need to make. Cross plans to add an amendment stipulating that the payments be equal for all retirees, whether state workers or lawmakers, although he also said premiums could be indexed to a retiree’s pension.
“If someone is making $20,000, they should pay a different amount than someone making $100,000,” he said.
But they would have to pay.
“We just can’t sustain this,” Cross said. “If we do nothing, there is a chance we have no system.”
The bill now goes to the full House. Cross said it could get a vote as early as next week.
Doug Finke can be reached at (217) 788-1527.