Quinn signs bill to cut state funding of retiree health care benefits

By Jamey Dunn

Retired state employees will soon likely have to pay premiums for their health care, but there is no way for them to know yet how much they will have to shell out.

Gov. Pat Quinn signed Senate Bill 1313 today, which removes guaranteed subsides for retiree health care. Currently, most retired state workers do not pay premiums for their coverage. However, they do have other out-of-pocket costs, such as co-payments. Supporters of the bill say that the cost of the benefit was putting a strain on the budget and a burden on taxpayers. “Close to 80,000 state retirees do not pay a premium for their health care; we simply cannot afford that anymore,” said House Republican Leader Tom Cross. “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.” According to Quinn, the benefit costs about $800 million annually.

However, it is nearly impossible to predict what this law would save the state. While it goes into effect in July 1, it is only the start of a multi-step process. Under SB 1313, Central Management Systems would choose an amount that the state would pay for retiree health care. That number would then go through the collective bargaining process and would have to be approved by the Joint Committee on Administrative Rules. Quinn has said he plans to have employees pay on a sliding scale based on their income. So, currently retirees cannot predict what they might be asked to pay in the future.

Quinn said the change will make the retiree health care program sustainable. “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,” Quinn said in a written statement. “We also have a duty to taxpayers to ensure these plans are cost-efficient and put Illinois on the path to fiscal stability.”

But opponents say the law will make life difficult for retirees who are living on a fixed income and did not plan for the change. “This bill jeopardizes affordable health care for state and university retirees,” Virginia Yates, president of AFSCME Retirees Chapter 31, said in a written statement. “The governor saying his action ‘preserves health benefits’ is political double talk, and his claim that our health coverage is ‘free’ is false. In fact, seniors like me and 114,000 other retirees and dependents already pay $3,000 a year or more in co-pays, deductibles and premiums. By cutting retiree health care at the same time he’s handing out hundreds of millions in tax giveaways to big corporations, Governor Quinn shows his priorities are out of touch.”