By Andrew Thomason | Illinois Statehouse News
SPRINGFIELD — Gov. Pat Quinn signed legislation to end premium-free health insurance for state retirees Thursday.
The state currently spends about $800 million annually on the insurance program; however, the exact savings from the new law won’t be known until a premium rate is negotiated between the state and public labor unions.
“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. “We also have a duty to taxpayers to ensure these plans are cost efficient and put Illinois on the path to fiscal stability.”
Under the former system, about 90 percent of state employees didn’t pay health insurance premiums. This benefit created a $54 billion unfunded retiree health-care liability for the state.
Kelly Kraft, Quinn’s budget spokeswoman, said it was still unclear what affect the legislation will have on the unfunded health-care liability.
Unlike the pensions, which have dedicated funds that are invested and used to pay costs, retiree health care is a pay-as-you-go system, draining more and more from the state’s general revenue fund.
“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,” state Sen. Christine Radogno, R-Lemont, said.
Virginia Yates, president of the public union American Federation of State, County and Municipal Employees Retirees Council 31, had harsh words for Quinn.
“This bill jeopardizes affordable health care for state and university retirees. The governor saying his action ‘preserves health benefits’ is political doubletalk, and his claim that our health coverage is ‘free’ is false,” Yates said, pointing out that state retirees still pay co-pays and deductibles for health care.