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* Here we go again…
A key state senator said he will try to push legislation during the upcoming veto session that would require retired state employees to pay premiums for their state health insurance.
Sen. Jeff Schoenberg, D-Evanston, said he is still working on details of the plan, but he wants to have something he can give lawmakers to study before the veto session starts Oct. 25.
“We can’t sustain the existing situation where more than 90 percent of retirees pay absolutely nothing for premiums,” Schoenberg said. “If we don’t do something now, then inevitably everyone’s current benefit levels will be jeopardized and co-payments for everyone will inevitably rise.” […]
“There are retiree chapters already preparing to make their voices heard in the coming weeks if affordable health care is threatened in the veto session,” AFSCME spokesman Anders Lindall said. “Retired state employees have very modest, fixed incomes. They already pay a significant cost for their health care, and those costs are subject to collective bargaining.”
* I’m hoping to get the Illinois version of a recent national poll, but Doug Schoen’s latest survey found this related nugget…
However, there is a clear distinction in voters’ minds between what current public employees should be asked to contribute and what retired public employees should be asked to contribute. Sixty-nine percent say retirees should “not have to” contribute more towards their health-care benefits or take a reduced pension because of state and local government budget problems.
More…
Further, by 48% to 40%, voters say that public employees’ salaries should be “frozen,” and they should be required to contribute more towards their benefits when states face the type of crises they are now facing. Close to two-thirds (64%) say they would not be willing to have their taxes raised as a means of keeping salaries and benefits of current employees at current levels. […]
One of the reasons voters feel so strongly about reducing the level of compensation for state employees is that they believe that they are earning disproportionately high wages relative to those in the private sector.
There is a clear belief that public employees are better compensated than those in the private sector: 41% of voters think “the salaries and benefits of most public employees are too high for the work they do,” while 32% think they’re “about right” and 13% think they’re “too low.”
* A new study by the Center for State and Local Government Excellence took yet another stab at comparing wages and benefits between private sector workers and state and local government employees. The full study is here. The overall conclusion…
* State and local workers have a wage penalty of 9.5 percent.
* Pension contributions and retiree health insurance help close the gap.
* Total compensation for public sector workers is about 4 percent less than that in the private sector.
* Meanwhile, I wrote about this a while ago, but didn’t identify the legislator. I figured he probably already had enough problems, and, besides, he wasn’t really too upset about it. In fact, when Rep. Harris confirmed the story, he laughed about the whole thing…
While lobbying this spring for lawmakers to support a change in pensions for city workers, Emanuel called Democratic state Rep. Greg Harris, a longtime acquaintance who represents Emanuel’s North Side neighborhood. Harris opposed the legislation, which never got traction in Springfield.
Emanuel pressed Harris to change his mind, and, according to several lawmakers who heard the story, began swearing at him and threatening to burn down his house if he didn’t.
Harris didn’t dispute the story but declined to provide details of the conversation.
“It was a really heated exchange, but that’s fine, that’s politics,” Harris said. “People are passionate about their positions, and sometimes things get intense. … I also have a temper, and I know bad words too.”
I talked to Harris over the weekend about the Trib piece and he chuckled again, then got a bit peevish that the media was focusing on stuff like this and not the bigger problems at hand.
By the way, I’m pretty sure he’s still a “No” on the pension bill.
* Related…
* Editorial: Some hope remains for Tinley mental health facility survival
* School day debate is getting ugly - CPS, teachers union accusing each other of pressure tactics
* Emanuel, labor find common ground on health plan
* Editorial: Crowd-sourcing the budget
* Ald. Cardenas Calls for Police, Fire Closures
* Police mull closing district stations
* Some county commissioners say furlough days are for union workers, not them
* Looming fight over Cook County health system budget
* Editorial: CHA: Don’t toss out good eggs with bad
posted by Rich Miller
Tuesday, Sep 20, 11 @ 3:41 am
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Senator Schoenberg hosted a fund-raiser for U.S. Senator Bernie Sanders last week. I’m sure if Schoenberg had asked Sanders how to close the budget gap, he would have suggested that Schoenberg tax the rich rather than dig into the pockets of retired social workers, nurses, and other caregivers.
Schoenberg has plenty of constituents with deep pockets in his district. He could tap them for taxes instead of campaign contributions and leave state employees whose average pension is only $23,000 alone
Comment by truthteller Tuesday, Sep 20, 11 @ 6:12 am
Rich, thanks for publishing the stats on the Public-Private Wage/Benefit Comparison. It helps to show people the facts to counter the rhetoric regarding public pensions. Words like “Bloated” and “Unsustainable” are put into the proper perspective, and shown to be at the heart of the current campaign to demonize public employees.
Comment by PublicServant Tuesday, Sep 20, 11 @ 7:09 am
Senator Cullerton, Senator Murphy, and Ralph Martire, Executive Director of the Center for Tax and Budget Accountability will be on a panel today at UIC in Chicago entitled “Charting the Course Toward Illinois Solvency: A Panel Discussion”. They’ll be taking questions from the audience. Anything you want asked?
Comment by PublicServant Tuesday, Sep 20, 11 @ 7:13 am
If they are going to charge the retirees more-which they probably should-shouldn’t they at least let them apply the premiums to the claims that go unpaid for almost a year which providers require the retirees to pay because they very reasonably don’t want to wait for almost a year?
Comment by Just Asking Tuesday, Sep 20, 11 @ 7:49 am
While comparing public vs. private compensation is important, why isn’t job security mentioned much in these discussions? Today, public employees, thanks to AFSCME, have high job security while private employees have much less, often with the threat of job loss hanging over their heads every day. 4% less compensation for high job security sounds like a great deal to me.
Comment by Sir Reel Tuesday, Sep 20, 11 @ 7:50 am
Threatening to burn down somebody’s house is not okay no matter how passionate you are about your position.
Comment by Leave a Light on George Tuesday, Sep 20, 11 @ 7:54 am
Good point, Just asking.
While republicans collectively chant, “no more borrowing!” they obstruct an obvious solution to the state’s disgraceful backlog of bills. Every time a state employee or retiree goes to the doctor the state is borrowing more and gets deeper in debt. Now, their solution is to charge the already struggling retirees more for what they call insurance but really isn’t if you have to use it.
Schoenberg, like a lot of so-called democrats, has forgotten where he came from. He’s gotta go.
Comment by Bill Tuesday, Sep 20, 11 @ 8:00 am
@Reel - Why don’t you ask the 1,938 public employees who just received layoff notices how that “high job security” you allege (without support I might add) is working for them.
Comment by PublicServant Tuesday, Sep 20, 11 @ 8:21 am
Rich, a counter to the Center for State and Local Government Excellence from the Reason Foundation.
While the recent study from the Center for State & Local Government Excellence and the National Institute on Retirement Security comparing public sector and private sector compensation levels correctly notes that aggregate comparisons of average public and private wages and benefits can be misleading, its conclusion that state and local government employees are under compensated, compared to private-sector employees, is suspect at best. The analysis ignores the value of virtually ironclad job security and certainty of pension benefits, features that are notably absent in the private sector. It also overlooks the greater efficiency and productivity of private sector workers, which is a result of competitive pressures not experienced in government agencies. The conclusion that public-sector workers are more highly educated than comparable private sector workers, upon which higher pay and benefit levels is justified, is called into question by the fact that not all college degrees are equal (and may vary between public and private sector employees) and the possibility that governments are hiring overqualified workers because they face looser budget constraints than private companies (i.e., governments are overpaying for their labor).
There are other considerations outside the scope of the report that affect discussions of the cost of government services. Since retiree health care costs are expected to continue to rise rapidly, and public employees’ retiree health care benefits are significantly greater than those of private sector employees, this will increase government workers’ total compensation relative to comparable private sector employee compensation. Furthermore, even if we assume that public employees are underpaid, or at least not overpaid, that does not mean that the number of government workers is necessary or desirable, or that the cost and scope of government is not excessive.
The fact is that state and local government labor costs are continuing to escalate drastically. There is a reason why the City of Vallejo, California, cited skyrocketing pension costs as the chief cause of its fall into municipal bankruptcy, and why many other local governments in California and elsewhere are on the brink of bankruptcy. There is a reason why California’s pension costs have been described as unsustainable by everyone from the chief actuary of the California Public Employees’ Retirement System to Republican Gov. Arnold Schwarzenegger, to Democratic State Treasurer Bill Lockyer. There is a reason that governments at the federal, state, and local levels achieve significant cost savings by contracting with private sector businesses to provide a wide variety of services previously performed by government workers. State and local governments in California and across the nation must address public employee compensation levels if they are to maintain any sense of fiscal responsibility, particularly in these difficult economic times.
Adam B. Summers is a policy analyst at Reason Foundation.
Comment by Truth Seeker Tuesday, Sep 20, 11 @ 8:30 am
===The analysis ignores the value of virtually ironclad job security and certainty of pension benefits===
Actually, if you’d read the study, that’s factored in.
Comment by Rich Miller Tuesday, Sep 20, 11 @ 8:32 am
If Governor Quinn is serious about addressing the State’s fiscal situation-charging more for retiree health is low hanging fruit- the state could likely save upwards of one hundred million/year by bringing retiree health costs more in line with what other states have done- the days of providing cadillac health care not only to active but also retired public employees has long past
Comment by Sue Tuesday, Sep 20, 11 @ 8:32 am
===Furthermore, even if we assume that public employees are underpaid, or at least not overpaid, that does not mean that the number of government workers is necessary or desirable===
Doesn’t really apply to state government here, for obvious reasons.
Comment by Rich Miller Tuesday, Sep 20, 11 @ 8:34 am
A commentor named truth seeker cutting and pasting from the Reason Foundation, a wholly owned subsidary of Koch Industries, is pretty funny.
Comment by Bill Tuesday, Sep 20, 11 @ 8:39 am
It’s too early to judge, but the great thing about Emanuel is that he has put to rest, forever, the “Daley is indispensable” nonsense.
A lot of people who should have known better turned a blind eye to a lot of corruption in service of that lie.
Comment by wordslinger Tuesday, Sep 20, 11 @ 8:45 am
Just so we know who’s being quoted by Truth Seeker,
From Wikipedia:
The Reason Foundation is an American nonprofit think tank founded in 1978 that also publishes Reason magazine. Based in Los Angeles, Reason is SELF-DESCRIBED as nonpartisan and publishes a statement of values that can best be described as libertarian.
Comment by PublicServant Tuesday, Sep 20, 11 @ 8:46 am
Public Servant: have the 1,938 received official layoff notices? Will this layoff really happen, or is it the Governor setting the stage? Even if it does, 1,938 is a small fraction of the total State workforce. I agree that playing games with these employees’ lives is disgraceful, but many private employees live day-by-day with the threat of job loss. My point is compensation is not the only consideration when comparing public vs. private jobs.
Comment by Sir Reel Tuesday, Sep 20, 11 @ 8:49 am
@ Sir Reel. I do not see how a threat of termination in the public sector is any less harrowing than it would be in the private sector. Under either scenario, it wreaks havoc on the lives of the working class. Whether or not the layoffs happen or not is irrelevant.
Comment by Slick Willy Tuesday, Sep 20, 11 @ 9:05 am
===Whether or not the layoffs happen or not is irrelevant.===
I need some more caffeine. That should read, “Whether the layoffs happen or not, is irrelevant”.
Comment by Slick Willy Tuesday, Sep 20, 11 @ 9:07 am
@Sir Reel: I agree, but the bills being proposed don’t address job security, they address compensation.
Comment by PublicServant Tuesday, Sep 20, 11 @ 9:20 am
I don’t see a problem charging state retirees a small monthly premium. I even think a progressive premium system would help matters greatly. There are plenty of state retirees who make way more than the median annuity. They can and should be asked to foot some of the bill, especially since most state retiree co-pays for meds and visits are better than Medicare beneficiaries’s costs.
Comment by Team Sleep Tuesday, Sep 20, 11 @ 9:43 am
Hmmm. Rahm swearing at the CTU president and threatening to burn down someone’s house over a vote. I bet he keeps his bodyguards nice and close. The guy is a bully and a tyrant.
Comment by Fed up Tuesday, Sep 20, 11 @ 10:05 am
He:
Your facts are totally wrong. No retiree, no matter how many years of service gets free medical care. Retirees pay the same co-pays & deductibles as active workers do. Retirees who have 20 years credible service pay no insurance premium. A worker who retires with 8 years of service would pay a full premium based on his or her income level.
“How many part time jobs get pensions and free health care after 8 years of service? IL Legislators! Just Sayin! “
Comment by Fed Up Tuesday, Sep 20, 11 @ 10:14 am
Whoops he
Sorry, missed the part about state legislators. They are different than the rest of us.
Comment by Fed Up Tuesday, Sep 20, 11 @ 10:16 am
What part of the Illinois Constitution, Article XIII, Section 5. Pension And Retirement Rights that reads “Membership in any pension or retirement system of the State, … shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.” is being misunderstood?
If the legislature wants to go after benefits and wages, they ought to start in their own house.
Comment by Huh? Tuesday, Sep 20, 11 @ 10:31 am
If you have to charge higher premiums to current employees, or start charging premiums to retirees in order to keep the system solvent, so be it — but don’t try to make up for the past 5 or 10 or 20 years of budgetary negligence in one fell swoop. Do it gradually, like every private sector employer I’ve ever had does.
I as a current state employee could live with a premium going up by, say, $20 bucks a month or even $50 a month each year for the next 5 years or so; but don’t expect me to suddenly start paying $250 a month more. Likewise don’t expect retirees to go from paying 0 premiums to paying $5,000 a year or whatever all at once.
Comment by Secret Square Tuesday, Sep 20, 11 @ 10:52 am
Thanks Sen. Jeff for thinking of the little people first whilst leaving the legislator’s benefits untouched…please just for once, share the pain…
Comment by Loop Lady Tuesday, Sep 20, 11 @ 11:21 am
Senator Schoenberg’s wife is chair of the state education labor relations board while he collects campaign contributions from IEA and IFT teachers unions. He wants to divert state employee benefits to send the money to teachers. Just a little conflict of interest. All the ethics paperwork state employees have to fill out doesn’t appear to be working.
Comment by Liberty First Tuesday, Sep 20, 11 @ 11:51 am
The Mercer report was not fair and balanced. It merely surveyed other states, rather than paying attention to existing research including the Kaiser Family Foundation and Health Research & Educational Trust EMPLOYER HEALTH BENEFITS 2010 ANNUAL SURVEY — http://ehbs.kff.org/ In 2010, covered workers on average contribute 19% of the premium for single coverage, and 30% of the premium for family coverage. On average, workers with single coverage contribute $75 per month and workers with family coverage contribute $333 per month towards their health insurance premiums. Health insurance for State Retirees is NOT FREE. The Kaiser report also reported that from 2006 to 2010, the percentage of covered workers with a deductible of $1,000 or more for single coverage has almost tripled, from 10% to 27%. The average annual deductibles among those workers with a deductible for single coverage are $601 for HMOs, $675 for PPOs, $1,048 for POS plans, and $1,903 for HDHP/SOs (High Deductible Heath Plan) The average amounts for workers with an aggregate deductible for family coverage are $1,321 for HMOs, $1,518 for PPOs, $2,253 for POS plans, and $3,780 for HDHP/SOs.
Comment by ANAL Tuesday, Sep 20, 11 @ 12:23 pm
“41% of voters think “the salaries and benefits of most public employees are too high for the work they do,””
I hate to say it, but I think that is true at the two state agencies where I’ve worked. There are some who are underpaid, some who are overpaid, and some who get what they’re worth. I’ve found that to be the case wherever I’ve worked in my life, but the percentage of overpaid people in state government is much higher. Too many state employees treat their job as an entitlement and act as if they are doing the state a favor simply by showing up. With their work ethic, they’d be lucky to make half as much in the private sector.
Comment by Pelon Tuesday, Sep 20, 11 @ 12:38 pm
Bottomline - As a State Employee of 37 years I would be tickled to receive the exact same benefits, wages, and total compensation of ANY Illinois legislator of four terms, no questions asked. I believe a poll of most other long time state employees would find that they agree.
So, Sen. Jeff Schoenberg, D-Evanston, make that your proposal, and I will come down and help you lobby the rest of the GA.
However if you aren’t willing to do that then please explain publicly in the media why it is that members of the GA are so elite, evidently so much more valuable, that they are worth the total compensation packages they receive. It can’t be based on actual accomplishments, assignments completed, or work done. As I have seasonal workers that have accomplished more in the last two years than the GA has.
Comment by Irish Tuesday, Sep 20, 11 @ 1:34 pm
Two quick points about the voter poll on public vs private compensation.
(1) Does Doug Schoen think we can’t do math? He writes, “There is a clear belief that public employees are better compensated than those in the private sector,” then cites results showing 45% of people think public employees are paid too little or about right, vs 41% who think they’re paid too much.
(2) Who paid for this poll? Click through to the WSJ page and in the fine print at the bottom it says The Manhattan Institute, which is a right-wing libertarian group and part of the State Policy Network, like the Illinois Policy Institute and others, which are secretly bankrolled by Cato, the Koch Brothers, etc.
Comment by Reality Check Tuesday, Sep 20, 11 @ 1:46 pm
As a retired state employee I think I pay about $150/month for Medicare, which is my primary insurer, so that isn’t free. The state’s (secondary) coverage, effectively a Medicare supplement/prescription drugs program, costs me no premium because I had more than 20 years of service.
I believe the state coverage costs the state about $300/month. If I’m correct, then total premium for my health coverage is $450/month, of which I pay 33%. Read the last sentence very carefully. I don’t get free health insurance. I simply pay no premium for the state sponsored portion of it.
If I misunderstand or misstate this in some way, please correct me.
Comment by steve schnorf Tuesday, Sep 20, 11 @ 2:22 pm
PublicServant…Please see below from the website of the funder of the “Center of Excellence” describing their business and their relationship to the center.
It appears this bias may match the one you are suggesting the Reason Foundation has.
About Us
We Build Retirement Security
The ICMA Retirement Corporation was established in 1972 by the International City/County Management Association (ICMA) with the assistance of a Ford Foundation grant. At the time, ICMA-RC provided the only portable retirement plan for public employees, enabling them to transfer accumulated retirement assets between employers. Today ICMA-RC manages assets for over 920,000 local and state government participants in more than 9,000 plans.
Center for Excellence
A Collaborative Effort to Strengthen State and Local Government
The Center for State and Local Government Excellence was created in 2007 with financial support from ICMA-RC to respond to the challenges facing state and local governments as they sought to attract and nurture the best workforce for the 21st century.
Comment by Truth Seeker Tuesday, Sep 20, 11 @ 2:23 pm
The education factor of the study is indeed worthy of more examination since it we have to determine, once and for all, if the education backgrounds of the public service employee is necessary for their job function.
Steve Schnorf,
Do you know how much an average non-unionized private sector worker contributes to his supplemental insurance?
All,
I know a few bad words too. I’d love to trade a few with Rahm over a beer sometime…
Comment by Cincinnatus Tuesday, Sep 20, 11 @ 2:50 pm
C, I was simply making the point that I and other Medicare-age retirees don’t get their health insurance premium-free, as so many like to toss around.
For some reason you seem to think it is reasonable to compare the state’s employees to non-unionized employees. I don’t understand that. Why do you do so, since our employees are 90+% unionized?
Comment by steve schnorf Tuesday, Sep 20, 11 @ 2:55 pm
Steve,
I wanted to compare payments in the private non-unionized sector (90+% of all workers) to the benefit package you described (which tracks with unionized public service employees). I couldn’t lay my hands on the data, and I thought you may have it. I am making no judgements either way on the issue without first looking at some data.
Comment by Cincinnatus Tuesday, Sep 20, 11 @ 3:08 pm
===private non-unionized sector===
Hey, man, instead of deriding unions, perhaps they should join one.
Comment by Rich Miller Tuesday, Sep 20, 11 @ 3:09 pm
Why doesn’t Schoenberg go after current Illinois Tollway employees. They don’t pay a penny for health, dental & optical. And they rub it in your face. Plus they’re doubling the tolls very soon.
Arrogant bunch !
Comment by Shadow Tuesday, Sep 20, 11 @ 3:30 pm
Sorry but everyone in the private sector has had their “promised free health” cost them something
Retired private sector workers who were promised free health care have seen their insurance premiums go about about every year even after getting it free
Comment by What??? Tuesday, Sep 20, 11 @ 3:36 pm
Having made the point above that my health insurance isn’t free, as Schoenberg and others seem to misunderstand, and that I pay about 33% of the premium cost, I believe state retirees should pay some of the cost of their state-based coverage.
I know, a lot of people will say, that wasn’t the deal we retired with, and it wasn’t. But times change, and this is a fight that ought to end, and instead we should seek something workable for retirees, for state government, and for taxpayers.
Jeff is all caught up in an expensive consultant’s report and recommendations: with their expert credentials how could they be wrong? I have to tell you I can’t even begin to understand the formula Jeff has suggested, and I’m not stupid.
KISS! Try this. It has progressivity, and really shouldn’t get great opposition from retirees if sold well.
For current retirees, on each of the next anniversary dates when a pension COLA is due, add a 1% premium charge to the retiree’s pension until:
>pensions of $30,000 or less are paying 1%
>pensions of $30-50,000 are paying 2%
>pensions above $50,000 are paying 3%
Do the same thing with new retirees, starting either with their retirement dates, or their COLA anniversary dates.
Within 3 years, every one is paying a significant portion of the cost, and those with the high pensions everyone talks about would be paying 100% of their costs. Fiddle with the formula and the numbers to make it work but this is easily understandable, not some mumbo-jumbo
Insurance is collectivism, and this approach should be acceptable enough and painless enough to be passed.
Comment by steve schnorf Tuesday, Sep 20, 11 @ 4:18 pm
Anyone know if the proposal will include general assembly and judges retirees? They are state employees too.
Comment by Soccertease Tuesday, Sep 20, 11 @ 4:45 pm
Retirees have to pay health insurance premiums? Egads, what is this country coming to.
I applaud Senator Schoenberg and any other Dems who are willing to stand up to the unions and continue to try and normalize public employee benefits.
Comment by siriusly Tuesday, Sep 20, 11 @ 5:06 pm
Sen Schoenberg is going to take $300 - $400 million dollars out of the downstate economy. This is where almost all of the retirees live.
Comment by A former democrat Tuesday, Sep 20, 11 @ 6:00 pm
To Sen Jeff: Your not in my district but I know a few ppl who are in yours that won’t be voting for you in your next term because you wnat to go after state retirees. Stop trying to balance the budget and cut in areas that aren’t even level to the private sector retirees benefits. If you want to make cuts look at cutting your own retirement. Making 80 percent of your base salary at retirement is crazy.
Comment by Anonymous Tuesday, Sep 20, 11 @ 6:07 pm
I haven’t seen the details on Schoenberg’s latest bill, but the previous one was just ridiculous. Here are two examples:
My mom retired many years ago after 43 years of service on a “state only” pension; she doesn’t get Social Security, not even survivor’s benefits from my deceased father because of the offset rule. The only SS benefit she gets is his right to Medicare, which she pays for (as others have noted). She also gets around the average pension. She would have had to pay About $125 a month in premiums.
I also retired from the State with a better than average pension and 36 years of service. Because I was young when I left under the ERI, and I’m paying for a same age wife to be on my insurance, we’re not yet eligible for Medicare. The previously announced legislative plan was going to hit me somewhere north of $600 a month (plus dependent & co-pays). Ain’t no way a 3% rule will cover those kinds of rates … I’d have to be collecting a $240,000 annual pension!!! But why should I have to pay $600 just because I retired early under ERI? If I was still working, I’d only be paying around $100 a month (plus $100 for a dependent that I currently pay) for the same coverage I have now.
As far as those on Medicare getting better prescription benefits, the State insurance simply serves as a Medigap program and a prescription program. Before a fed rule change raising the rate and discouraging participation, there were a a couple of Medicare HMO programs that provided equivalent medigap coverage at almost no cost.
Steve, I agree insurance is collectivism; always has been, always will be as long as “group” policies exist. Young healthy people have always subsidized older sick people’s premiums; that’s the way group insurance works. I used to be one of those young healthy people; now I’m older but happily still healthy but I’m going to get treated rate wise as if I wasn’t healthy. If the State is paying different rates for different ages instead of a flat rate for everyone, then someone at the State didn’t do a good job with the procurement. (Rich won’t let me used the terms I would like to use to describe what happened to the State on that kind of deal.)
Anyway, guess we’ll just wait and see how bad this bill is going to be … hopefully, unlike the last bill, it won’t single out the under 65 ERI people for a trip to the woodshed …
Comment by Retired Non-Union Guy Tuesday, Sep 20, 11 @ 6:19 pm
RNUG, the Senator’s overeach on the non-Medicare retirees is one of the main reasons his proposal isn’t too my liking (my inability to understand the GD formula is another). Perhaps my suggestion asks too little of people.
The non-Medicare retiree problem will go away on its own over the years to come thanks to pension reform, but in the meantime it probably does have to be dealt with to some extent. I would suggest a flat $100/month at retirement, plus the 1-2-3 formula I suggested. Its not what the union-busters want, but it’s something. If the pension is 50k, and the retiree contributes $1200 plus $1500 per year, that’s probably close to 40% of premium.
Comment by steve schnorf Tuesday, Sep 20, 11 @ 7:15 pm
Retirees began paying for dental insurance 2 years ago.
Comment by Emily Booth Tuesday, Sep 20, 11 @ 7:32 pm
I am a retired University of Illinois professor with 2 dependents. I have $133/month health plus $20/month dental deducted from my SURS payment. My wife and I also pay Medicare premiums of $322/mo. Total monthly premiums are $455 health plus $20 dental, or $5700/year.
Comment by OldIllini Tuesday, Sep 20, 11 @ 8:43 pm
Let’s all continue to remind Jeff and others that we don’t get free health insurance. Jeff?
Comment by steve schnorf Tuesday, Sep 20, 11 @ 9:02 pm
Steve,
We might also want to remind Jeff and the rest of the legislature that the “free” health insurance on retirement after 20 years (originally 8 years) was intended at the time to stop the “brain drain” and promote long term career employees in government.
That is part of the reason I stuck around in the mid-80’s; with about 15 years in at the time, it didn’t make sense, benefit wise, to leave even though I had a couple of very, very lucrative offers from several different technology companies. (Remember the government mandated AT&T split-up back then? They were paying enormous sums to anyone who had the qualifications and drove up the salaries for a lot of IT jobs.)
Anyway, that’s why I ended up a career employee … too much time already invested and the promise of future benefits.
Comment by Retired Non-Union Guy Tuesday, Sep 20, 11 @ 9:28 pm
Yes, and to address the 2nd or 3rd career folks who went to work for the State for 8 years, caring very little about salary or pension, but getting that health care forever.
Comment by steve schnorf Tuesday, Sep 20, 11 @ 9:40 pm
Emily,
You’re right. I had forgotten about that. It was the camel’s nose under the tent wall …
Steve,
I wouldn’t have a problem paying the same as someone still employed .. that would be fair under a group plan. If some idiot at the State messed up the procurement of group health so it costs them a ton more for older people, that ain’t my problem …
Maybe some of us old timers should volunteer to do show the current bunch how to do competitive procurements … and then hire Tristano on contract to negotiate a “best & final” deal to really tighten up the terms …
Comment by Retired Non-Union Guy Tuesday, Sep 20, 11 @ 9:42 pm
Sweet Jesus!! When I got to CMS we were shadow pricing the HMO premiums rather than cost-pricing. I kept not asking the right questions, and I simply couldn’t get the “cost” numbers to make sense vs. the premiums the HMOs were charging us. What a mess. Mike was/is brilliant.
Having said that, I think the HMO coverage for Medicare retirees is about $300/month. One problem is that a disproportionate number of retirees take the PPO, and it’s a fair amount more expensive.
The percentage of retirees taking HMOs has risen over the years, but PPO is still disproportionate. One reason is that out of state retirees usually have no choice available other than the PPO.
I believe something is going to happen on this issue in the next 24 months, maybe much sooner. Think what happened in less than 24 hours with the second tier pension plan. My experience is when something is going to happen you’re almost always better off getting involved and seeing if you can lead the parade rather than being chased by the mob.
Comment by steve schnorf Tuesday, Sep 20, 11 @ 10:02 pm
Speaking of anything other than the same rate charged working employees, wouldn’t that violate some of the group and exchange rules under the Affordable Care Act? Or wouldn’t it violate Federal or State age discrimination laws? After all, us retirees are over the magic age of 50 …
Comment by Retired Non-Union Guy Tuesday, Sep 20, 11 @ 10:02 pm
- steve schnorf
I think we need to remember why Sen Jeff is using the very unfair formula ($500-$900 per month) and not a reasonable one that you suggest, is… the $300 - $400 million dollars he hopes to raise (and can’t raise with a reasonable formula) has already been promised out for all the unproven government programs; mostly in Chicago. This is about raising revenue to spend…. not saving money to pay down the debt!
Comment by A former democrat Tuesday, Sep 20, 11 @ 10:06 pm
I don’t think you can/should try to count the Medicare premium as part of your state retiree health insurance cost. The Medicare cost is the same regardless of whom your employer was. The Medicare cost will be the same regardless of what happens with your state insurance. You could refuse to pay a state insurance premium, drop the state insurance, and still be eligible for Medicare coverage. So, I don’t buy that argument.
I want the state government to limit retiree medical insurance to people who actually work for the state up until the day before they begin drawing a pension. No more of people putting 20 years in, quitting for 20 years, and then getting back on the health insurance when it is time to collect a pension. You’ve managed to deal without state insurance for the time in-between, continue to deal with it. FYI - This means you too, legislators.
Comment by mythoughtis Tuesday, Sep 20, 11 @ 10:19 pm
I’ll also add that the State “bribed” me to retire under the 2002 ERI by letting me buy 5 years of service (which I paid my retirement contribution on) and giving me 5 years of age (which I didn’t need to hit the rule of 85), knowing full well that I was entitled to the health insurance under the 20 year rule.
That cost was known up front … but the “State” was more concerned with cutting immediate payroll (GRF) and freeing up positions / slots to be handed up as patronage when the next Gov took office. The legislature knew what was going on and passed legislation for the ERI. As a result of the 2002 ERI, they got 11,000 empty head count. Now they didn’t fill a lot of those positions, but given current GRF payroll numbers, you can bet a lot of the MC titles (at the time) like PSA and SPSA, and either single or double exempt positions, all got filled ASAP. The “State” got what it wanted at the time, GRF savings and patronage head count slots … now the “State” wants to reneg on part of the deal (health insurance).
Like Steve said, this perceived problem will take care of itself in a few more years. The youngest you could be under the 2002 ERI was 50 and you would have had to start working for the State almost right out of high school to have had enough years to qualify.
Every year there are less and less retirees from the 2002 ERI under age 65. Each year there are less, the State spends less on their health insurance (since the cost is much lower for Medicare retirees). Any number you quote for savings today decreases each year going forward. By the end of 2017 (6 more years) there won’t be any retirees left under Medicare age … and there won’t be any savings left. Problem solved.
Comment by Retired Non-Union Guy Tuesday, Sep 20, 11 @ 10:51 pm
Didn’t President Obama promise that we could keep the same coverage and our premiums would not increase. In fact, under his passed plan (according to him) premiums were suppose to decrease. So… what’s going on???
Comment by A former democrat Tuesday, Sep 20, 11 @ 11:48 pm
The more I think about it, I’m sure ACA rules apply.
All of us retirees got a letter last year saying the State had taken some ACA money to maintain health insurance for early (non-Medicare) retirees in FY11 and that the State was going to receive the same for FY12, FY13 and part of FY14 (til Jan 1, 2014) under, I believe, the Early Retiree Reinsurance Program.
http://www.errp.gov/download/TheAffordableCareAct.pdf
I also believe the State filed for and received a waiver under ACA for their (union) health insurance program until something like 2017.
Taking all that money and getting the waiver should make the state employee health insurance program subject to ACA rules …
Comment by Retired Non-Union Guy Wednesday, Sep 21, 11 @ 12:11 am
For all of you that arewanting to blame the unions for the pension crisis, take a look at the following I found on the internet that was compiled by the Associated Press. The pension mess in Illinois goes way back, much earlier than when unions represented state employees. Remember, Illinois did not have real collective bargaining for its employees until the mid 70’s.
”
Illinois’ pension debt problem is the nation’s worst when accounting for both the money owed and how underfunded the systems are. Here is a look back at how the pension problem developed, according to information reviewed by The Associated Press.
– 1950: An actuary for the Teachers Retirement System warns that state contributions “are far from adequate to meet the current requirements of the system” and the system’s funding is “unsound.” At the time, TRS has only 23 percent of the funding needed to cover benefits earned.
– 1970s: For many years, the amount the state pays into the five pension systems is based on 100 percent of what those systems are expected to pay out each year in benefits. But the debt grows because the funding does nothing to address the much higher costs of benefits being earned by employees each year.
– 1982-1988: State contributions to the pension systems drop to an average of 60 percent of retiree benefits being paid out each year. That setup is ultimately dropped, and a flat payment is made each year into the systems.
– 1989: Lawmakers approve a 40-year payment plan to have the pensions fully funded, with a seven-year phase-in period. But state law doesn’t require set payments each year and the funding guidelines are never met.
– 1995: Gov. Jim Edgar and lawmakers agree on a 50-year plan to get the pensions as much as 90 percent funded by 2045. The plan requires the state to put in a certain amount of money each year and ramps up funding so each year more is required in state payments. Initial payments are smaller, requiring larger increases in later years.
– 2003: A downturn in pension systems investments puts the funds at just 48 percent funded, with a $43 billion debt. New Gov. Rod Blagojevich and lawmakers agree to borrow $10 billion in pension bonds, using most of that to pay down pension debt and get the systems to 61 percent funded. Some of the cash is used to pay other state bills.
– 2005: Governor pushes for lawmakers to adopt a host of pension reforms recommended by a commission of experts and lawmakers that would lower future pension costs for new state employees. Lawmakers approve some of the changes, saving the state tens of billions of dollars in the long-term. Others, such as raising the retirement age and service requirements, are left on the negotiating table.
– 2006-2007: Blagojevich and fellow Democrats in the Legislature agree to cut pension payments by more than $2 billion over two years to help pay other budget needs. The move forces the state to increase more if its payments over the next several years to get back on the 50-year payment track.
– 2008: The pension debt stands at $42 billion, and the systems combined are about 63 percent funded. That combination gives Illinois the worst pension funding problem in the nation, according to an Associated Press analysis of national data. The debt grows by $3.6 billion in interest alone each year.”
Read more: http://www.nwitimes.com/news/local/article_5a2754dd-a45d-5556-8cf0-c58115871381.html#ixzz1YajgmpDK
Comment by Fed Up Wednesday, Sep 21, 11 @ 8:01 am
As usual, Schnorf ruins the opportunity for emotionally charged rants by maliciously injecting knowledge and wisdom into the discussion. You’re a buzzkill, dude.
Comment by wordslinger Wednesday, Sep 21, 11 @ 8:59 am