You have to get up pretty early in the morning to overcome a $76 billion pension shortfall. Gov. Pat Quinn sent out an e-mail at 5:08 a.m. announcing that he’s signed a bill to require 80,000 retired state employees to pay for a portion of their health insurance. Illinois now provides free health insurance for retirees with 20 years of service. But legislators get it after only four years, and judges after six.
As the e-mail noted:
No other state offers a health care benefit of this size…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.
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.
The bill, which was co-sponsored Sen. Jeffrey Schoenberg, D-Evanston, and Sen. Christine Radogno, R-Lemont, passed the Senate 31-20 last month, with most of the “nay” votes provided by members of Quinn’s own party. The bill was a bipartisan victory for Quinn, who needs to show voters that a Democrat will make demands of public sector employees, especially now that Illinois has been named the state with the worst pension shortfall. The decision follows trends in the private sector: in 2007, General Motors took free health care away from salaried retirees.
How much retirees have to pay will be determined through labor negotiations, with the Joint Committee on Administrative Rules having the final say.
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