State House votes to end free health insurance for retired workers - Arlington Heights Daily Herald

Article updated: 5/9/2012 9:30 PM

The Illinois House agreed Wednesday to stop providing free health insurance for longtime state employees once they retire. Gov. Pat Quinn and House Speaker Michael Madigan want to end the free insurance as part of the effort to cut costly retirement benefits for public employees.

Madigan said making retirees pay for their health insurance isn't pleasant but it's less painful than many of the other budget decisions awaiting lawmakers. "If we can't do this, what in the world are we going to be able to do?" the Chicago Democrat said.

The vote disappointed the American Federation of State, County and Municipal Employees. The union's deputy director in Illinois, Roberta Lynch, called it "shocking" and a serious blow to people on fixed incomes.

"This kind of radical, sweeping approach — we don't think that's the way to operate," she said.

Now, the amount that retirees pay for health insurance depends on how long they worked for the state. Those who worked 20 years or more don't pay any premium at all, although they do have co-pays and deductibles.

The House voted 74-43 to end that policy and let a state agency decide what premium retirees will pay, based on retirees' length of service and ability to pay. The measure now goes to the Senate.

Quinn, joined by the House speaker and Senate president, argues that retirement and Medicaid costs are growing so fast that state revenues can't keep up. He said the Medicaid program that serves 2.7 million people is on the verge of collapse.

Retiree health care costs $800 million, according to the Department of Central Management Services, and employee premiums cover only 3 percent of that. About 78,000 state retirees don't pay any premium.

Some legislators said it would be unfair to suddenly yank away a benefit that employees have factored into their retirement plans.

"They feel that the state has sold them out," said Rep. Robert Pritchard, a Hinckley Republican.