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Governor signs bill to end free health insurance for State of Illinois retirees

June 21, 2012
Illinois Gov. Pat Quinn

Illinois Gov. Pat Quinn

The Associated Press is reporting today that Illinois Gov. Pat Quinn “has signed a law that ends free health care for state retirees and requires them all to contribute to the cost of health care, based on their ability to pay.”

Rich Miller’s Capitol Fax begins its coverage this way: “We still don’t know how much this proposal would save, but it’s now a law …”

Senate Bill 1313 eliminates the current system of health benefits for retired state employees, including university retirees. The current system provides retirees with “free” health care after 20 years of service.

While state insurance for retirees will still be available, existing and future retirees will now have to pay a monthly premium for this insurance.

The director of the Department of Central Management Services has been charged with the responsibility of establishing the level of these annual premiums. It is anticipated that there will be a formula that takes into account age (and Medicare eligibility), length of service and ability to pay.

Although the law will take effect July 1, 2012, it will take some time for CMS and SURS to implement the changes. A letter from CMS director Malcolm Weems indicates ‘Any changes will likely not go into effect before January 1, 2013.’

According to a press release from the governor’s office, the bill will “help ensure that state of Illinois retirees will continue to receive access to quality health care, while also lowering the cost to taxpayers. Illinois currently offers free health insurance to retirees after 20 years or more of service, at a time when no other state offers a healthcare benefit of this size.”

“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,” Gov. 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.”