Bill to cut state-subsidized health care advances

By Jamey Dunn

A House committee moved today to end a guarantee that the state will subsidize retiree health care.

State employees currently do not have to pay premiums for their health care if they have worked for 20 years or more. Legislators are not charged premiums if they serve for eight years or more. Under Senate Bill 1313, which is sponsored by House Speaker Michael Madigan and House Minority Leader Tom Cross, that deal would be eliminated. Instead, Central Management Services would present a premium that retired state employees, university employees, lawmakers and judges would have to pay. The measure would apply to current retirees. According to the sponsors of the bill, the number reached by CMS would apply to all the retirement systems equally and would be subject to collective bargaining negotiations. The estimated cost the state will pay for retiree health benefits for the current fiscal year is $876 million.

Madigan said that he does not consider the bill to be linked with negotiations about pension reform. Gov. Pat Quinn has proposed that employees be given the choice of keeping their subsidized health care benefits while seeing a reduction in their pension benefits or footing the bill for their health care while keeping their current benefits. “[SB1313 is] a significant step, and a step we clearly ought to take if, for no other reason, for no other reason, to set the tone for the budget making for the next 30 days,” Madigan said. He said he is backing the bill, in part, because of a request from Quinn's office. Quinn ducked the news media after a public appearance in Springfield today, and as of press time,  his office had not replied to questions about the legislation.

Cross said that the number CMS comes to would likely be based on the amount of money lawmakers say is available to spend on retiree health care. He said the measure is not aimed at eliminating state subsidies for retiree health care but at stabilizing the program by asking workers to cover more of their health care costs. “There will be no more free health care coverage.”

Anders Lindall, a spokesman for the American Federation of State County and Municipal Employees Council 31, said the idea that retirees receive free health care is “totally false.” He said that while they do not pay personal premiums, they do cover copays and deductibles. They also pay premiums for family members covered under their plans. “There is a very wide array of costs that retirees bear.” AFSCME estimates that retirees with average health care needs, not including treatment for a serious illness or long-term hospitalization, pay about $3,000 to their medical costs annually.

Lindall said that health care coverage is a part of employee compensation, and the venue for changing it is not the legislature but the collective bargaining table. AFSCME is currently in the process of renegotiating contracts with the state. “It gives the appearance of trying to end-run collective bargaining or to use the legislative process to manipulate collective bargaining to gain some type of advantage,” Lindall said. “And in this case, to use retirees as pawns in that game, I think that’s cynical. I know that tens of thousands of retirees now on fixed incomes and dependent on their affordable health insurance are worried and upset, and that shouldn’t be happening. They shouldn’t be used as collateral for anyone to achieve whatever other ends they have in mind.”