SPRINGFIELD, Ill. (AP) — Illinois lawmakers gave a preliminary nod to a money-saving move on Wednesday that would take away a big health care perk for retired government workers, part of a battle over cutting state pension costs.
The proposal by Speaker Michael Madigan, D-Chicago, moved to the House floor after getting approval from the Democrat-controlled Executive Committee. It could become a bargaining chip with a public-employee union angry over looming cuts to pension benefits, particularly because Democratic Gov. Pat Quinn asked lawmakers to adopt it as he negotiates a new contract, according to Madigan.
Quinn wants to reduce the state's annual pension payment by making employees work longer, put more of their pay into retirement funds and get smaller cost-of-living increases after retirement. The unions maintain that would violate the state constitution.
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Joined in a rare bipartisan push by House Republican Leader Tom Cross, Madigan has proposed eliminating the full health insurance premium the state now covers for most retired employees who worked 20 years.
Currently, after eight years in state government, 40 percent of the premium is paid. That increases 5 percent a year until there's no premium at all.
The subsidy costs Illinois $876 million a year, with 78,000 retirees paying no premium — about $7,400 per person a year — according to Cross.
"The goal here is to not to eliminate health care coverage but to make sure it is sustainable through retiree contributions," Cross said.
The American Federation of State, County and Municipal Employees, the state's largest government-employee union, said retirees pay the same deductible as active state workers and their co-pays for doctor visits, prescriptions and other services come out of pocket. Retirees also pay premiums for dependent coverage, according to the union.
On average a retiree pays about $3,000 a year for health care, AFSCME spokesman Anders Lindall said.
Joanna Webb-Gauvin, a lobbyist for AFSCME, told the committee that the legislation would gut a fundamental part of labor negotiations.
"Health care benefits are a part of an employee compensation package," Webb-Gauvin said. "It's always been subject to the collective bargaining process."
The union has made concessions in other areas to ensure fuller health coverage, Webb-Gauvin said. In fact, it was through contract negotiations during a budget crisis in the early 1990s that the union agreed to require 20 years of work before the state paid a retiree's full premium — it used to be eight years, she said.
AFSCME's four-year contract expires June 30.
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