Governor Pat Quinn’s office announced early this morning that he has signed a measure that will require retired state and public university employees to kick in more money for their health insurance. That will officially do away with the current method of allowing those who retire with at least 20 years of service to get free health coverage. Those who retire with less time worked get a portion of insurance costs paid for.
This law will allow the Quinn Administration to set up a new system, which will determine health insurance rates based on length of service and pension income. The legislation was passed in the spring as a cost savings move for state government.
Quinn’s office estimates as many as 90 percent of retirees currently pay nothing toward health insurance. The Governor has stated the costs were too much for the state to bear and called this is a way to preserve the system for retirees.
groups representing workers and retirees have argued the government is going back on a promise made to those who have served in the public sector.
The law will take effect July first… but the new rate system won’t be known until after labor negotiations are complete.
The Governor’s news release is below:
CHICAGO – June 21, 2012. Governor Pat Quinn today signed a bill into law to help ensure that state of Illinois retirees will continue to receive access to quality health care, while also lowering the cost to taxpayers. Illinois currently offers free health insurance to retirees after 20 years or more of service, at a time when no other state offers a healthcare benefit of this size.
“Those who have faithfully served the state deserve access to quality health care, and insurance costs should be more balanced and based on actual retirement income,” Governor Quinn said. “We also have a duty to taxpayers to ensure these plans are cost-efficient and put Illinois on the path to fiscal stability.”
Introduced at the request of Governor Quinn, Senate Bill 1313 passed the General Assembly with bi-partisan support. Sponsored by Sen. Jeff Schoenberg (D-Evanston) and House Speaker Michael Madigan (D-Chicago), SB 1313 was also supported by Senate President John Cullerton (D-Chicago), Senate Minority Leader Christine Radogno (R-Lemont) and House Minority Leader Tom Cross (R-Oswego).
The purpose of the new law is to increase fiscal responsibility by requiring all state retirees to help with the cost of health care based on their ability to pay. Currently, retired legislators receive free health insurance after four years, retired judges after six years, and retired state and university employees after 20 years of service. The result is that approximately 90 percent of retirees are not contributing anything for the cost of their health insurance. The annual cost to taxpayers is nearly $800 million. This law ensures the state will be able to continue offering quality healthcare coverage for retired employees, while making healthcare benefits more affordable for taxpayers.
Many Midwestern states, including Iowa and Minnesota, do not provide any subsidy for retired employees. Instead, they provide access to their plans and leave the entire cost to be paid by the retiree. Other states offer a very limited subsidy. For example, Florida offers retirees a monthly subsidy of $150, while the retiree covers the remaining cost. While some states utilize a formula similar to Illinois’, where the amount of the subsidy is based upon years of service, no comparable state offers free health insurance after 20 years. This law allows Illinois to continue offering affordable health insurance that is based on a retiree’s ability to pay and length of state service.
While the bill goes into effect July 1, final decisions on rates will be made following labor negotiations and approval by the Joint Committee on Administrative Rules. Please see the attached document for quotes from the bill’s sponsors, as well as General Assembly leadership.
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Legislator Quotes
“This is a year for difficult choices, and passing this bill is the first of many. While I take no joy in the loss of a benefit for hard working retirees, I am proud of our efforts to stabilize the state budget for now and the future,” said Senate President John Cullerton (D-Chicago).
“I have a lot of compassion for those people who retired anticipating a certain benefit that now may be changed somewhat,” said Senate Republican Leader Christine Radogno (R-Lemont). “Having said that, this is a step Illinois must take to right the financial ship. Without critical reforms, the current structure is unsustainable, and taxpayers are on the hook for programs they cannot afford. Senate Bill 1313 is critical to accomplishing the goal of fiscal stability.”
“This important step was absolutely necessary to protect the quality and affordability of health insurance for retirees from public employment, particularly those living on fixed incomes who have no other coverage,” said Assistant Senate Majority Leader Jeff Schoenberg (D-Evanston), who was the sponsor of SB 1313.
“Close to 80,000 state retirees do not pay a premium for their healthcare; we simply cannot afford that anymore,” said Illinois House Republican Leader Tom Cross (R-Oswego). “I commend the Governor and other leaders in the General Assembly for supporting this important reform that will bring more fiscal stability to the state. These new premiums will be negotiated by the administration and labor unions, who will come to an agreement that is fair for the taxpayers and the retirees.”
Well, free health insurance does seem a little too generous when so many Americans have none or must pay enormous sums for individual policies that can be terminated at any time.
But affected retirees will have to make their own decisions. If I were one of those affected, I surely wouldn’t be voting for Quinn, Tom Cross or anyone else who voted yes. These are extremely wealthy men who have allowed a great deal of waste and corruption to take place in Illinois state government. And it’s still taking place.
What about these polititians that only have to be in office 2-4 years that get their insurance free and still get over $100,000 (easy) a year when they retire? Why do they always cut every bodies pentions but theirs? Wouldn’t that save millions too? All they have to do is get voted in office and they are set for life. They don’t even have to do a good job or work till a certain age to get their retirement. I do agree that sometime we have to give up something to get something, sometimes but they sure don’t give up anything of theirs.
You are exactly right Mary and no, I won’t be voting for any of them. Not that I voted for Quinn in the first place and Cross is not my rep. I am one of those affected and I have often said it is probably an unfair perk that we do not pay anything. However, all I want to know at this point is how much we’re talking here and is it also going to affect what we pay for my husband as he is also on my insurance as a ‘dependent.’
Martha, according to the figures posted in the Benefits Choice handbook, my husbands insurane will be over $1,000 and mine over $250 until we are eligible for medicare – 3 1/2 years for him and 5 years for me…that’s 10 times what we paid last year. He works a retirement job @ $10 an hour with no benefits – he’s a retired teacher, I buy & resale merchandise in an antique mall, and now have to go back to work full-time to pay for insurance. I retired for health reasons from U of I at 56 and sure wasn’t expecting or prepared for this. Our SS will be cut by 2/3 due to both having state pensions which are also at risk of being cut back. All politicians should have the same cuts as they vote in for the rest of us. They can afford it much better than we can! Its a sad thank you for our public service totalling 51 years! My vote will not go to those in office now.
Assuming you’re correct, he can switch to his teacher’s retirement health care and pay a similar rate to yours. I hope I don’t have to do the same.
We will have the same situation. How inconsiderate our legislators have become after we the people elected them to public office. I could understand new retirees paying for insurance, but the real problem is the theft of our retiement to start with and the high rate of insurance companies. how about looking at fixing insurance rates?
Looking into insurance through Teahers Retirement System was no help as the premium would also be over $1,000. One website I checked that compared private insurance plans listed $500-$1000 premiums with $5000 to $7500 deductibles….unacceptable! We’ve always llived modestly and know how to handle our money…the politicians should take lessons from all the retirees who have learned to live within their means over the years and maybe they wouldn’t have to make decisions that rob us of our hard earned retirement funds to fix problems they created!
How can this possibly be legal, totally ignoring the ethical question of making modifications after the fact? Twenty two years I’ve worked for the state in several different agencies and retirement plans, with an eye on retiring in the next few months as the insurance provider for myself and husband. Now all that will probably change; I feel duped.
Well, one of the reasons that I stayed at one of the worst prisons for 25 years was the health care. i guess all those yrs of stress dont matter to any of these crooked pols. We had money in our pension fund until the pols raided it over and over again. They make the mistakes and the workeers pay. GET OFF MY BACK!!!
As a retired state employee (34 years) I realize that we all have to ‘take a hit” to help a struggling economy. However, unless I missed something, no where in the information about the health insurance cuts do I see that the legislators or judges are taking a similat “hit” (only four & six years of service). This is one of many reasons why our elected officials are so reviled these days. We all do our part EXCEPT for them! Please keep this in mind during the next election.
I thought Judges were exempt from these laws. I am hoping law suits will be filed and stop this nonp-sense. My health care will more than double in cost and they they still are not clear on what we will be getting for the money. They will also attack your pension and cola in exchage for health care that will be managed by cms—CMS= can’t mange sh–t.
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I don’t see why the insurance should be based on your retirement monthly income. I believe that current employees are not charged a monthly premium based on their income, it is based on one or more dependents, then why are we not charged based on one or more dependents??? When you purchase private Blue Cross & Blue Shield or any other health insurance they don’t charge you based on what you make and this should not be the case for retired employees.
My husband is retired and he has to pay for our health insurance, it is based on how many dependents not how much we make. Taking away retirement health insurance has been happening for awhile now. Keystone Metalworkers retirees health insurance was taken away and I am sure there is other cases I do not know about. I hope that Governor Quinn has to pay for his retirement insurance based on his income. We surely should not have to cover his cost of retirement health insurance nor any other politician. If this new Illinois Bill does not affect the politicians of Illinois, then the people of Illinois should voice their opinion to the State Capital to make this happen. I always say what is good for the goose is good for the gander.
I agree Ann. I’m wondering what the amount I will have to pay for my husband’s insurance…that’s the real pinch for us. the original info was that it would be over $1,000…no way we can pay that much!