Senate approves bill requiring state retirees to pay for health insurance
A bill requiring retired state employees to begin paying premiums for their state health insurance is on its way to Gov. Pat Quinn.
The Senate voted 31-20 to approve Senate Bill 1313. The House approved it Wednesday.
Gov. Pat Quinn issued a statement saying he will sign the bill.
“This legislation will help ensure that our retirees continue to have access to quality health care while also lowering the cost to taxpayers,” Quinn said in the statement.
The bill ends the premium-free health insurance benefit available to state and university retirees, lawmakers, judges and some retired teachers.
Instead, the Department of Central Management Services will determine what premiums retirees should pay for state health insurance coverage. Those premiums would be reviewed by a bipartisan panel of lawmakers before they take effect.
Retiree health insurance costs the state nearly $880 million a year, and the costs continue to rise. Last year, the cost was pegged at $680 million. At the same time, 90 percent of retirees do not pay premiums toward their health insurance, although they do pay for dependent coverage, co-payments and other out-of-pocket expenses.
“The current situation is both unaffordable and unsustainable,” said Sen. Jeff Schoenberg, D-Evanston. “If we don’t address this issue, not only will unfunded liabilities grow, but those who are receiving insurance will likely see their co-payments rise dramatically or the richness of their benefits package be diminished.”
Sen. Larry Bomke, R-Springfield, said he thinks the bill is unconstitutional because it applies to people who retired years ago from the state with the expectation of receiving health insurance at no premium cost if they worked 20 or more years for the state. The benefit was put into state law in 1997. Bomke said the change should only apply to future retirees.
“I don’t disagree we need to do something about the health care and the costs, there’s no question about it, but prospectively,” Bomke said. “To vote yes on this bill will simply mean that we’ll have a court challenge, we’ll spend millions of dollars we don’t have trying to defend it, only to realize it’s not constitutional.”
Bomke voted against the bill, as did Sens. Sam McCann, R-Carlinville, and John Sullivan, D-Rushville. Sen. Bill Brady, R-Bloomington, was the only senator representing the Springfield area to vote in favor of it.
Senate Minority Leader Christine Radogno, R-Lemont, said the bill is the kind of tough vote everyone in the chamber said they were willing to make when they campaigned for office.
“I bet every single person in this chamber has campaigned on how we need to right the ship of state,” Radogno said. “If we vote ‘no’ on the possibility that something is wrong on this bill, we are taking the easy road out.”
The size of the premium a retiree will pay hasn’t been determined. Schoenberg said it will be a sliding scale based on years of service and size of a person’s pension.
“We will make sure it will be done based on an ability to pay,” Schoenberg said. “Those who make more as active employees and who make more as retirees through their pension would pay more than the very people we are trying to protect.”
But John Cameron, director of political affairs for the American Federation of State, County and Municipal Employees, contended the cost will be significant.
“This will take hundreds of millions of dollars out of the pockets of retired state employees,” Cameron said. “It’s no different than assessing a huge tax increase on those individuals. We you are doing here is both breaking a promise to retirees and shifting a cost onto their shoulders.”
Cameron said the state could eliminate a series of business tax breaks that would produce more than enough money to cover health insurance costs for retirees.
The Quinn administration did not respond to request for comment.
Doug Finke can be reached at 788-1527.