Readers,
A reader has requested this article be posted and asked that readers call State Senator Mulroe's office to let him know how you want the Senator to vote on this issue:
"State retirees who are fed up with the budget being balanced on their backs and who are fed up with broken promises, need to call Senator Mulroe and vote NO to this bill"
Committee OKs requiring state retirees to pay health premiums
State government retirees – many of whom don’t pay premiums for health insurance – would have to pick up roughly half the cost under a bill approved by the Senate Executive Committee Sunday.
The prospects for the bill, Senate Bill 175, are uncertain, however. Two senators on the committee said they voted for it only in order to give the full Senate a chance to consider the measure. They did not pledge to vote for it when it is debated by the full chamber.
The bill would affect thousands of retired state employees, most of whom pay no premiums for their state health insurance, according to a consultant hired by the state. Mercer Health and Benefits said that is a rarity both among state governments and large private employers.
Illinois reduces health insurance premiums by 5 percent for each year a retiree worked for the state, so a retiree with 20 years on the job pays nothing in premiums.
Sen. Jeff Schoenberg, D-Evanston, sponsor of the bill, said the state’s unfunded liability for retiree health care is estimated to be $30 billion. If retirees begin paying health insurance premiums, the debt would be cut by at least $10 billion, Schoenberg said.
“If we don’t do this, we’ll see increases in co-payments and reductions in the caliber of benefits,” Schoenberg said.
Schoenberg said he particularly wants to target workers who held upper income jobs in state government and retired before age 65, when they would be eligible for Medicare.
Premiums would be based on a person’s pension income, length of time with the state and age at retirement. Those with higher pension incomes would pay more. People who work longer for the state before retiring get a break under the theory they are closer to qualifying for Medicare.
For people on Medicare, the state health plan is a supplemental policy, and the state’s cost to insure Medicare-eligible people is dramatically lower -- $300 a month versus $800 for someone in the fee-for-service plan.
Someone with a pension of $15,000 to $30,000 a year could pay as much as $4,400 a year or as little as $777, depending on other factors like length of service and age at retirement.
If the bill becomes law, non-union retirees would begin paying premiums Jan. 1. Union retirees would not begin paying until July 1, after current contracts expire. The bill also does not apply to retired teachers.
John Cameron, political director for the American Federation of State, County and Municipal Employees, said retiree health insurance issue is a matter of “grave concern” for the union.
“This is essentially deferred compensation earned by our members,” Cameron said. “They were promised this, and now it is being snatched from them. This is an attempt to circumvent collective bargaining.”
AFSCME also said thousands of people were lured into early retirement by the state to save money, and many of them based that decision on health insurace.
Sen. John Jones, R-Mount Vernon, opposed the bill. He told of a retired state worker who visited him. The man is undergoing cancer treatment and broke down and cried about the possible insurance charges, Jones said.
“He sure as heck didn’t need this issue right now,” Jones said.
Sen. Maggie Crotty, D-Oak Forest, said she thinks low-income pensioners should be exempt from premium payments.
It’s unclear if significant changes can be made with the scheduled end of the session only two days away. Schoenberg said he is studying his options.
Doug Finke can be reached at 788-1527.
The prospects for the bill, Senate Bill 175, are uncertain, however. Two senators on the committee said they voted for it only in order to give the full Senate a chance to consider the measure. They did not pledge to vote for it when it is debated by the full chamber.
The bill would affect thousands of retired state employees, most of whom pay no premiums for their state health insurance, according to a consultant hired by the state. Mercer Health and Benefits said that is a rarity both among state governments and large private employers.
Illinois reduces health insurance premiums by 5 percent for each year a retiree worked for the state, so a retiree with 20 years on the job pays nothing in premiums.
Sen. Jeff Schoenberg, D-Evanston, sponsor of the bill, said the state’s unfunded liability for retiree health care is estimated to be $30 billion. If retirees begin paying health insurance premiums, the debt would be cut by at least $10 billion, Schoenberg said.
“If we don’t do this, we’ll see increases in co-payments and reductions in the caliber of benefits,” Schoenberg said.
Schoenberg said he particularly wants to target workers who held upper income jobs in state government and retired before age 65, when they would be eligible for Medicare.
Premiums would be based on a person’s pension income, length of time with the state and age at retirement. Those with higher pension incomes would pay more. People who work longer for the state before retiring get a break under the theory they are closer to qualifying for Medicare.
For people on Medicare, the state health plan is a supplemental policy, and the state’s cost to insure Medicare-eligible people is dramatically lower -- $300 a month versus $800 for someone in the fee-for-service plan.
Someone with a pension of $15,000 to $30,000 a year could pay as much as $4,400 a year or as little as $777, depending on other factors like length of service and age at retirement.
If the bill becomes law, non-union retirees would begin paying premiums Jan. 1. Union retirees would not begin paying until July 1, after current contracts expire. The bill also does not apply to retired teachers.
John Cameron, political director for the American Federation of State, County and Municipal Employees, said retiree health insurance issue is a matter of “grave concern” for the union.
“This is essentially deferred compensation earned by our members,” Cameron said. “They were promised this, and now it is being snatched from them. This is an attempt to circumvent collective bargaining.”
AFSCME also said thousands of people were lured into early retirement by the state to save money, and many of them based that decision on health insurace.
Sen. John Jones, R-Mount Vernon, opposed the bill. He told of a retired state worker who visited him. The man is undergoing cancer treatment and broke down and cried about the possible insurance charges, Jones said.
“He sure as heck didn’t need this issue right now,” Jones said.
Sen. Maggie Crotty, D-Oak Forest, said she thinks low-income pensioners should be exempt from premium payments.
It’s unclear if significant changes can be made with the scheduled end of the session only two days away. Schoenberg said he is studying his options.
Doug Finke can be reached at 788-1527.
I do believe state workers need to contribute to their retirement healthcare costs, as I do. What I think what may be unfair for current state retirees is that they did not have the chance to plan for this cost. For retirees on the low end of the pension scale- this is really going to hurt. For retirees receiving pensions over $60,000/year, I don't think it will hurt as much, but remember State retirees get no social security.
ReplyDelete" A reader has requested this article be posted"
ReplyDeleteWhat is the procedure for making a post request?
Guest writers are welcome, just post a comment with your idea and email address for me to respond to. Label your comment: For blog moderator only.
ReplyDeleteThis is an insane situation. Government employees have cadillac pension plans while the rest of us watched our pension plans get dumped along the roadside twenty years ago and then watched our IRAs/401Ks go down the toilet in the crash of 08. Does anyone have any sympathy, or even more, does anyone even have a clue?
ReplyDeleteI'm sorry that you "watched your pension plan and IRA' go out the window" Government workers are doing what you should have done 20 years ago and that’s fighting for what they have earned.
ReplyDeleteMy pension, which i have paid into for years, is nowhere near a "Cadillac pension" as you say, it’s more like a rusted out old Ford Pinto…but its mine, I earned it, and will fight to keep it.
Instead of blaming public employees you should blame your bosses who chose greed and profit over their employee’s futures. How sad though, we have middle class workers going after other middle class workers, while the CEO's just watch and laugh. The middle class is being killed by one another, only the wealthy and poor will survive.
Sen. Shoenberg's bill will not be voted on this session and will undergo some restructuring over the summer... latest from the Senator as of today
ReplyDelete4:42pm - very well said. Also, what has been forgotten: Past Republican governors dipped into and spent the State Employees pension fund and NEVER replaced/paid the fund back! How can this be the fault of the workers?
ReplyDeleteIn the future, I believe state employees need to contribute to health care benefits. For now though, especially for state workers who have relatively small pensions - making them pay for health insurance would cause hardship for them.
ReplyDeleteAnd to 2:30pm- what a selfish attitude. You should be telling your story to help other from being ruined. Also - most of the state workers around here don't have cadillac pension plans. Will pray for your mean spirit.
Current State retirees should not have to pay for health insurance - that was a benefit they were promised. For current state employees, ok to announce that when they retire, they need to assist with health insurance premiums - only fair thing to do.
ReplyDeleteThis isn't over - wait until next session. Thanks to the guest blogger who brought this to our attention
ReplyDeleteI'm tired of state and municipal workers saying they don't get social security. THEY DON'T PAY INTO SOCIAL SECURITY. I wish I had the option to opt out of social security and apply that money to a 401K or any kind of pension plan.
ReplyDelete