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*** UPDATED x1 *** Quinn signs bill ending free retiree health insurance premiums

Thursday, Jun 21, 2012

* We still don’t know how much this proposal would save, but it’s now a law

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. […]

Currently, retired lawmakers get free health insurance after four years of service and retired judges after six years. Additionally, retired state and university employees get free health insurance after 20 years of service.

Beginning July 1, all state retirees would pay a premium based on their years working for the state and ability to pay. The law doesn’t include teachers.

State Sen. Dan Kotowski claimed via press release last month that the proposal would save “about $200 million every year.” But that’s pretty much the only cost savings estimate out there, mainly because, as Kotowski noted in his May 10th press release, “it’s unclear how much retirees will specifically have to pay towards their insurance premiums.”

* According to the time stamp on the e-mail I received, Quinn’s office made the announcement of the bill signing at 5:08 this morning. Quinn portrayed the action as a way to “preserve health care benefits for state retirees.” From his press release

Governor Pat Quinn today signed a bill into law to 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. […]

The purpose of the new law is to increase fiscal responsibility by requiring all state retirees to help with the cost of health care based on their ability to pay. Currently, retired legislators receive free health insurance after four years, retired judges after six years, and retired state and university employees after 20 years of service. The result is that approximately 90 percent of retirees are not contributing anything for the cost of their health insurance. The annual cost to taxpayers is nearly $800 million. This law ensures the state will be able to continue offering quality healthcare coverage for retired employees, while making healthcare benefits more affordable for taxpayers.

Many Midwestern states, including Iowa and Minnesota, do not provide any subsidy for retired employees. Instead, they provide access to their plans and leave the entire cost to be paid by the retiree. Other states offer a very limited subsidy. For example, Florida offers retirees a monthly subsidy of $150, while the retiree covers the remaining cost. While some states utilize a formula similar to Illinois’, where the amount of the subsidy is based upon years of service, no comparable state offers free health insurance after 20 years. This law allows Illinois to continue offering affordable health insurance that is based on a retiree’s ability to pay and length of state service.

While the bill goes into effect July 1, final decisions on rates will be made following labor negotiations and approval by the Joint Committee on Administrative Rules.

By the way, the health insurance that retirees get is not “free.” They still have to make their co-pays and satisfy their deductibles. What Quinn is referring to here is the monthly premium.

*** UPDATE *** From AFSCME…

Statement of Virginia Yates, president of AFSCME Retirees Chapter 31:

“This bill jeopardizes affordable health care for state and university retirees. The governor saying his action ‘preserves health benefits’ is political doubletalk, and his claim that our health coverage is ‘free’ is false. In fact, seniors like me and 114,000 other retirees and dependents already pay $3,000 a year or more in co-pays, deductibles and premiums. By cutting retiree health care at the same time he’s handing out hundreds of millions in tax giveaways to big corporations, Governor Quinn shows his priorities are out of touch.”

About Virginia Yates
Virginia Yates worked for 27 years at the Murray Developmental Center. A Korean War veteran, she lives in Centralia.

- Posted by Rich Miller        

105 Comments
  1. - Mary - Thursday, Jun 21, 12 @ 9:19 am:

    Good news…everyone has to take a hit in this mess.


  2. - Honestly - Thursday, Jun 21, 12 @ 9:21 am:

    The fact that there is a claimed savings with no set premium levels shows that this move is primarily an ideological attack on public workers. Quinn the faux-populist!


  3. - Fed up - Thursday, Jun 21, 12 @ 9:21 am:

    So our lawmakers ( part time job) get to keep their health care after four years on the job. Well, that makes the free coffee seem like no big deal.


  4. - Louie - Thursday, Jun 21, 12 @ 9:22 am:

    How could these retirees complain? There are hundreds of thousands of people with no health insurance or they are paying $500 to $1,000 per month for plans with $2,500 deductibles and limited copays. Welcome to the real world.


  5. - Huh? - Thursday, Jun 21, 12 @ 9:23 am:

    What is the over/under on how long it will take for the first lawsuit to be filed?


  6. - Downstate - Thursday, Jun 21, 12 @ 9:29 am:

    Honestly -
    If Quinn is a “faux-populist” then there are no real populists left…….thank God!


  7. - bighead carpe diem - Thursday, Jun 21, 12 @ 9:29 am:

    Consider a construction company that received a state contract to build a road. After completing the work, the state decides that deal was too sweet and decides that the company should not receive its promised payout (its a perq, after all). I suspect the company would claim a default on the contract - and would likely win a claim in state court.

    Moving the goal posts during the game or nullifying the game winning field goal after time expires is simply a dumb way to officiate the game.


  8. - Anonymous - Thursday, Jun 21, 12 @ 9:31 am:

    Am I reading this correctly that it affects legislators, judges, university employees, and state employees, but exempts K-12 teachers? Why are the K-12 teachers exempt?


  9. - Rich Miller - Thursday, Jun 21, 12 @ 9:31 am:

    ===Why are the K-12 teachers exempt? ===

    Active duty teachers help pay for retiree health insurance premiums.


  10. - Cindy Lou - Thursday, Jun 21, 12 @ 9:35 am:

    hmmm, nine days away and still a big secret? So what happens if labor talks are still ongoing way into July? Last I heard negotiations were scheduled into July now. Then JCAR must approve. If it is effective July 1st, some of these retirees will be lucky to have anything for a pension check for a while due to having to cover back to July 1st.


  11. - Rich Miller - Thursday, Jun 21, 12 @ 9:38 am:

    ===the company would claim a default on the contract===

    There is no default here.


  12. - chefjeff - Thursday, Jun 21, 12 @ 9:50 am:

    “Ability to pay” based on what metric? Net worth? Income or adjusted gross? Pension amount? So we’ll have a flat rate of income tax, but a progressive health insurance premium. That’s backasswards.


  13. - Bill - Thursday, Jun 21, 12 @ 9:51 am:

    ==There is no default here.==
    Maybe, but that will be for the courts to decide. This smells like an “ex post facto” law that violates the contracts in effect when the state induced employees to retire early with false promises of reduced premium health insurance. I’m not opposed to some cost sharing but this law gives the state a blank check every year to steal from retirees.


  14. - one day at a time - Thursday, Jun 21, 12 @ 9:58 am:

    Legislative version of Bait and Switch= PA97-0695


  15. - bighead carpe diem - Thursday, Jun 21, 12 @ 10:01 am:

    Rich, a little explanation of how/why reneging on a promised benefit (each employee/retiree gets lots of paperwork on it presenting it as part of our compensation package) is not a default would be most helpful.

    ===the company would claim a default on the contract===

    “There is no default here. “


  16. - titan - Thursday, Jun 21, 12 @ 10:01 am:

    The consensus seemed to be that this was the one thing that the state had the clearest legal authority to do (and thus how it was to be the linchpin ‘carrot’ in setting up the ‘carrot and stick’ choice of alternatives for the public employees (i.e. give up the current benefit structure in exchange for a health care benefit)


  17. - Leave a Light on George - Thursday, Jun 21, 12 @ 10:06 am:

    “By the way, the health insurance that retirees get is not “free.” They still have to make their co-pays and satisfy their deductibles. What Quinn is referring to here is the monthly premium.”

    No kidding. My “free” health care cost me about $3 grand last year.


  18. - D.P. Gumby - Thursday, Jun 21, 12 @ 10:07 am:

    Louie…because they work for 20years to get it as part of the employment contract…that’s why many state and university workers stay. This is simply the GA putting responsibility for their failure to manage pensions by spending the money that should have put away in the good times. And don’t use the shibboleth that about all the people who don’t have insurance or private sector retirement. The fact that other people are screwed by the failures of private industry doesn’t justify government following the same practices.


  19. - Kerfuffle - Thursday, Jun 21, 12 @ 10:09 am:

    I’m with Fed up on this….”retired lawmakers get free health insurance after four years of service and retired judges after six years.” The issue isn’t so much that insurance is free as much as it is that they receive the benefits after so little time in service. This is truly indicative of the pervasive abuse of legislative power for not only themselves but on behalf of a powerful judiciary. The executive branch is obviously not blameless in this matter either in that some past governor(s) failed to veto this special interest legislation. (I’ll forgive them if their veto was overridden but I have grave doubts that ever occurred.) There ought to be a law that stipulates benefits for elected officials in all branches of state government may not be greater than those benefits provided to rank and file state employees. This is but the tip of the iceberg!


  20. - cassandra - Thursday, Jun 21, 12 @ 10:09 am:

    I was wondering the same thing as Cindy Lou. Will affected retirees get hit with a big retroactive bill when the state finally figures out how much to charge. Every year.

    I suppose another question affected retirees should be asking is, will the state be paying my medical bills on time now? We still read news reports about long payments delays and vendors requiring payment upfront, to be reimbursed later–much later–when they get their $$.


  21. - OurMagician - Thursday, Jun 21, 12 @ 10:11 am:

    Sounds like a good day to go to a school or something to hide behind a kid for a press availability. Or maybe Darren Baker’s available?


  22. - Bill - Thursday, Jun 21, 12 @ 10:14 am:

    It is no coincidence that he announces this signing in the middle of the night. Where’s all the hoopla? Passing out pens? long rambling speeches about Lincoln? This guy is a joke and he knows it.


  23. - sk hicks - Thursday, Jun 21, 12 @ 10:14 am:

    Will any future contract language have a “And this time we REALLY mean it” clause?


  24. - Inactive - Thursday, Jun 21, 12 @ 10:14 am:

    Why should k-12 teacher be exempt?

    Teachers do not get free health insurance in retirement. They can opt to pay for TRIP (Teachers Retirement Insurance Plan) which is insurance that is available only to those who have paid into it every paycheck while they worked. Still, at a reduced premium, retired teachers have to pay a monthly premium. Never, ever heard of teachers being part of some “free” retirement health insurance program.


  25. - Bill - Thursday, Jun 21, 12 @ 10:17 am:

    All state employees should remember this day when they try to talk you into giving up your COLAs in exchange for this now reduced benefit.


  26. - Cook County Commoner - Thursday, Jun 21, 12 @ 10:17 am:

    Has the lawsuit been filed yet? I presume the public employee representatives will file in state court. Considering that the state court judges have an avoidable conflict of interest in hearing the case, I am anxious to see how they disingenously avoid the conflict so they can rule on a matter that directly impacts their interests.


  27. - RNUG - Thursday, Jun 21, 12 @ 10:19 am:

    Rich,

    with teachers in the family, I will note that teachers have always paid their health insurance when they retired. Being part of the group plan reduces the rates, but thy\ey pay pretty much full freight.


  28. - Freeman - Thursday, Jun 21, 12 @ 10:21 am:

    === the only cost savings estimate out there ===

    Surely there must be another estimate out there somewhere, even if it’s not perfect… just something to get a ballpark estimate based on the state’s access to reams of information on such issues.

    I know! let’s give a quick glimpse at the financial impact statement for SB1313.

    Ummm… so much for that.


  29. - RNUG - Thursday, Jun 21, 12 @ 10:22 am:

    Cindy Lou,

    The premiums won’t start until the rates are set, HMO bids finalized, rates approved by JCAR, and another open enrollment period held to let people change plans. All this, and more, was publicly discussed by a CMS Dep Dir at the May RSEA meeting. Expect to see premiums start sometime after July 1 but not later than Jan 1, 2013


  30. - Mouthy - Thursday, Jun 21, 12 @ 10:23 am:

    “* According to the time stamp on the e-mail I received, Quinn’s office made the announcement of the bill signing at 5:08 this morning.”

    What, no big picture opportunity with the Civic Club folks? Missed photo op?

    As a 33 year SERS retiree I wouldn’t mind chipping a few bucks in for insurance. The story line I really detest is the one where they use my insurance to “extort” a huge reduction in my COLA so I potentially lose tens of thousands of dollars over a specific period of time.

    This is a plan I only benefit from if I die early.
    Geez.


  31. - Freeman - Thursday, Jun 21, 12 @ 10:23 am:

    In light of the absence of any formal estimate on the practical financial impact of this legislation, whether it be gain or loss to the state, I hereby submit my own estimate as a service to our state:

    Savings of $8.5 billion. Just enough to pay off the bill backlog.

    There! Now we have 2 estimates available!

    You’re welcome, Governor.


  32. - RNUG - Thursday, Jun 21, 12 @ 10:25 am:

    cassandra,

    They actually addressed that at the meeting I was at and the short answer is either a flat no or not much quicker.


  33. - Anonymice - Thursday, Jun 21, 12 @ 10:25 am:

    ==Teachers do not get free health insurance in retirement.==

    Neither do the regular state employees. They have to work 20 years to get it “free.” The teachers have a choice whether to take the “free” insurance or take more cash up front.

    ==How could these retirees complain? There are hundreds of thousands of people with no health insurance . . .==

    How could you complain if the State just decided to take your bank account? There are hundreds of thousands of people with no money in the bank . . .


  34. - Past the rule of 85 - Thursday, Jun 21, 12 @ 10:27 am:

    Pretty brave of the Governor to sign the bill before daylight. It looks like the only difference between Quinn and Walker is that Walker was honest with voters and has the courage of his convictions in placing the blame and burden on workers and retirees.


  35. - RNUG - Thursday, Jun 21, 12 @ 10:29 am:

    At the meeting I attended, they ducked specific numbers but the bottom line of the formula with all the magic squares sounded just like last year’s failed attempt. They denied it was the same, but they then described it and it sounded the same. All I could conclude was that it is the same plan, just with slightly different percentages in each box.


  36. - concerned citizen - Thursday, Jun 21, 12 @ 10:31 am:

    I’ve said it before, and here goes again…the FEDERAL constitution prohibits expos facto laws, thus taking away a benefit earned under law, then changing the law to take it away after you’ve earned it is going back in time to change the rules, thus is unconstitutional. Let the lawsuits begin…or, ah..too late, he signed it.


  37. - Brendan - Thursday, Jun 21, 12 @ 10:31 am:

    We should be following the lead of Iowa and Minnesota.


  38. - RNUG - Thursday, Jun 21, 12 @ 10:34 am:

    CMS is also basing their plans on the fact they have successfully survived lawsuits over the dental insurance. But there are differences: the dental was given to everyone with no service requirements and the rate was the same for both employee and retiree. Health insurance was conditioned on 20 years service and SB-1313 sets up varying rates, all of which will apparently be different from those charged the employees. And the retiree dependent rate will no longer be the same as the employee rate; instead it will be the same as the retiree rate.

    The lawsuit is going to hinge on that 20 year service requirement …


  39. - wordslinger - Thursday, Jun 21, 12 @ 10:34 am:

    We’re all going to spend the rest of our lives trying to figure out how to pay for healthcare.

    If any of you have had some old-timers at the end of their lives, and saw those seven-figure bills that no one can pay rolling in, you know what I’m talking about.

    It could be worse. My parents spent most of their lives trying to figure out where the next meal was coming from. The cost of healthcare wasn’t an issue because they knew they couldn’t afford to get sick.

    Eventually, we’ll all understand that the sawbones and pill pushers will need to take a massive haircut to make it work. No big deal; they’re not rocket scientists, anyway. They’re way overpaid, use too many gadgets, gizmos and pills, and last I checked, can’t walk on water.

    But I love the nurses. They’re angels of mercy and do most of the heavy lifting when it comes to healthcare.


  40. - Brendan - Thursday, Jun 21, 12 @ 10:37 am:

    @concerned citizen: the Latin term you are searching for is “ex post facto” and your interpretation is inaccurate. Not all ex post facto laws are unconstitutional.


  41. - Inactive - Thursday, Jun 21, 12 @ 10:38 am:

    I guess I didn’t write it correctly……..every 9.4% withdrawn from a teacher’s paycheck includes an amount automatically designated for TRIP. There is no choice involved here, other than quitting the job. No choice on the 9.4% and no choice about where it goes! What it Anonymice talking about? And as for Mouthy’s statement that this is a plan that only benefits me if I die early………..don’t you know that IS the plan? Surprised that the proposed legislation didn’t omit the option of ever retiring! Then the state would save a ton of cash!


  42. - Bill - Thursday, Jun 21, 12 @ 10:40 am:

    Don’t give Quinn all the credit. Remember Jeff Schoenberg. He’s been working on this for years. All state employees should show up in January to give him the finger as he slinks out the back door to grab his brass ring and his 30 pieces of silver.


  43. - Irish - Thursday, Jun 21, 12 @ 10:45 am:

    Bill - @ 10:17 am: And when they walk into the voting booth in 2014.

    I voted for the PQ that used to be. The pro environment, pro middle class, person who was out for the little guy.

    I will not vote for the pro big business, anti middle class Walker wannabe he has morphed into.

    We were all afraid of the Brady 10% across the board cuts. I think if you look close we have passed the 10% cut line a while ago.


  44. - illilnifan - Thursday, Jun 21, 12 @ 10:47 am:

    health care coverage either public or private is still costly. My retiree health care after co-pays, deductibles and co-insurance cost me $2500 last year and my husbands private pay insurance cost him $6000 last year after premiums, co-pays, etc. His is not a high deductible plan, this was PPO with a $1500 maximum out of pocket. We have learned that $1500 means nothing. Insurance companies have the power on this issue, and some how they get richer. Now lets look at state costs and how much insurance companies contribute to the legislators and then look for where the deals come, and those of us not in power get the shaft. Also look at who is abusing the system, the judges and legislators who get the option to free health care after minimal service. They also get the high pensions and the sweetners so this does not affect them as bad as the SERS retiree who gets a fraction of the pension they get and they worked under horrible conditions and reduced pay for a lot of years. I was a middle manager, when the unions and legislators got their raises I was told there were no raises for me.


  45. - east central - Thursday, Jun 21, 12 @ 10:57 am:

    An under-reported (almost unreported) aspect is that SURS members hired before 1986 are in general not covered by Medicare. For these annuitants the impact does not lessen when they reach 65. It is forever from their perspective.

    To point out the obvious, the consequences of this statute differ dramatically from one retirement system to another.


  46. - Cindy Lou - Thursday, Jun 21, 12 @ 11:02 am:

    Now with benefits choice period over as of the 15th, CMS obviously have some idea as to how many retirees were scared over into HMO vs QC. Is this number a secret for now too? I will assume these numbers would play somewhat into who pays how much.


  47. - BFro - Thursday, Jun 21, 12 @ 11:14 am:

    If you are not paying anything for a premium, that is free. Co-pays and deductibles are not part of that equation.

    As a self-employed person, I paid $2500/ month for my family AND had a sizable deductible. Now I still pay $700 for my family with a big deductible. Complaining about having to pay ANYTHING for healthcare shows how out of touch some people are about healthcare costs, particularly when talking about taxpayer money.


  48. - Honestly - Thursday, Jun 21, 12 @ 11:22 am:

    @ Downstate. I think you’re correct about no populists being left. But you can thank the one-percenters and their subjects.

    Regarding comments suggesting we should follow what was done to us private industry workers …
    How many think it was really a good idea to plunder private “real world” pension plans and health coverage so it could be trickled back down?


  49. - zatoichi - Thursday, Jun 21, 12 @ 11:25 am:

    I wish what is being paid for is made clearer in these discussions. At our small company, monthly employee costs are PPO ($900), HMO ($1,100), and HSA ($690). Deductible is high to simply make it ‘affordable’. Company pays $475 towards any plan, employee pays the rest and all family costs. Spouse costs add about $900 and Family coverage adds $1,200. We still have to cover copay and deductibles.

    What is the state and state employee actually paying for in dollars? Is the retiree now going to pay 100% of the actual cost or is there some percent or dollar amount the state will cover with the retiree doing the rest?

    Free insurance after 4-6 years? Sounds like a $18,000 - $25,000 raise to me with lifetime retirement coverage, depending on what coverage is allowed. Pretty sweet deal at some very large dollars.


  50. - Downstate - Thursday, Jun 21, 12 @ 11:32 am:

    Honestly,
    Thanks for the response. Not to be argumentative, but 1% doesn’t usually win at the ballot box. These changes are required by the new harsch reality of uncontrolled government spending. Believe me, Quinn would continue to run deficits if he could - it’s the cheapest way to buy votes.

    So why did he do this? Because Illinois won’t be able to float bonds on Wall Street, if we don’t get our fiscal house in order.

    Huh. Come to think of it, maybe the 1% (via Wall Street) are controlling this after all.


  51. - Liberty_First - Thursday, Jun 21, 12 @ 11:33 am:

    Cook County Commoner: The supreme court of Illinois has already set a precedent that that they have the right to hear these types of cases because there is no other court to do so.

    East Central - the legislation passed said CMS could take into account not being medicare eligible when setting premiums. There were also SURS employees who took a reduced retirement benefit in exchange for the the free health benefit. The law used to be free health care after 5 years service then it was changed to the 5% credit.

    Lawsuits can’t be filed until the legislation was signed by the governor.

    Their is kind of a default opinion that state insurance isn’t covered by the pension clause but that has never been tested in court.

    Contrary to popular belief, not every public employee has seen the kinds of raises AFSMEE workers have received. Universities have a lot of relatively low paid academic professionals and non-union faculty.


  52. - Demoralized - Thursday, Jun 21, 12 @ 11:39 am:

    ==How could these retirees complain? There are hundreds of thousands of people with no health insurance or they are paying $500 to $1,000 per month for plans with $2,500 deductibles and limited copays. Welcome to the real world. ==

    That is such a ridiculous argument and is made by people who have some un-natural hatred of state employees. Why should they complain? Because those that ALREADY retired made decisons based on a certain set of facts. The rules are now being changed after the game has started. If you can’t understand why that might be a problem then I don’t know what could be said to you to make you understand.


  53. - Rich Miller - Thursday, Jun 21, 12 @ 11:47 am:

    ===The rules are now being changed after the game has started. ===

    Sometimes, rules get changed between seasons.

    Look, I’m not unsympathetic here, it’s just that this argument of yours isn’t really going to stand up. People see the rules change on them all the time. It sucks, but it happens.


  54. - Downstate - Thursday, Jun 21, 12 @ 11:50 am:

    Rich,
    Do the unions have to be careful here? If they push too hard, what are the prospects of Madigan simply offering up a constitutional amendment ballot vote which upends the provision that the unions want to hang their hat on?


  55. - western illinois - Thursday, Jun 21, 12 @ 12:03 pm:

    Any legal argument would hinge on if this was a contract. If it was then there is the US federal constitutaionl contract clause. If it was a gratuity then it can be changed


  56. - Lucky - Thursday, Jun 21, 12 @ 12:11 pm:

    If I have to pay make it the same if I was still working. I served the citizens of the State Of Illinois


  57. - Honestly - Thursday, Jun 21, 12 @ 12:12 pm:

    =but 1% doesn’t usually win at the ballot box.=
    The 1% has been winning at the ballot box for a long time. They have the political parties, media corporations, and their many subjects who vote. The evidence is overwhelming (wealth disparity data,special tax breaks, Il’s service tax exemption, etc.) . I’m not defending the corrupt form of socialism that contributed to this mess, but there’s no evidence that our mess was caused by rank-and-file worker benefits.


  58. - huggybunny - Thursday, Jun 21, 12 @ 12:25 pm:

    so legally speaking, what’s the difference between a contract and a gratuity? What has to be in place for it to be a contract?


  59. - RetiredStateEmployee - Thursday, Jun 21, 12 @ 12:27 pm:

    ” this is a scorched-earth approach, focusing on what we can take away from others instead of how to make things better for everyone.” Anthony Mirhaydari

    This is one more step in the race to the bottom. I know all of you who don’t or didn’t work for the state thinks this is OK. But it will affect you, not now but in the future. Taking things away from each other just reallocates the money to the 1%. Maybe it’s fun for some to beat up on each other, but in the end, we all lose. It should be a sad time for all of us (except the 1%, they are doing fine, just check out CNBC)


  60. - East Sider - Thursday, Jun 21, 12 @ 12:42 pm:

    Retired lawmakers shouldn’t be receiving any subsidized health insurance benefits, let alone “free”.


  61. - Rich Miller - Thursday, Jun 21, 12 @ 12:44 pm:

    ===What has to be in place for it to be a contract? ===

    An actual contract, which, in this case, expires at the end of this month. Or a constitutional guarantee, which most say doesn’t appear to cover this benefit.


  62. - AC - Thursday, Jun 21, 12 @ 12:48 pm:

    For individuals represented by AFSCME who retired before the end of this contract, the 5% per year toward state employee health insurance premiums was part of the contract. Certainly, moving forward, the state can make changes to future retiree premiums, as they did when they went from 8 to 20 years. However, for individuals already retired, this would violate the contract agreed to by the state.


  63. - Inactive - Thursday, Jun 21, 12 @ 12:53 pm:

    ==Retire State EMployee==

    You are so right about the 1% (whom nobody seems to focus on). They have to mightily entertained by taking away homes from the disabled, RX coverage to the aged, cuts to impoverished schools, crowding up the prisons more………..while they worry about what new yacht to purchase next. We are fools to allow more anguish and hardship amongst honest, middle class working/retired folks while throwing our hands up at tax loopholes, record CEO compensation, etc. Would a solution to this whole financial crunch be to increase the taxes on the homeless and unemployed? Would that help?
    Better that than to get people who have means to pay their fair share?


  64. - Plutocrat03 - Thursday, Jun 21, 12 @ 12:55 pm:

    Basing payments on salary is an odd metric.

    If one had a higher salary, but more children or other dependents, they may be more financially stressed than someone with a lower salary and no responsibilities.

    Everyone should be treated equally.

    I do agree that retired lawmakers, who were in reality part time employees should not get free medical regardless of whether they served one term or ten. It should be public service, not an all you can eat buffet.


  65. - Whatever - Thursday, Jun 21, 12 @ 1:21 pm:

    I see it very clearly. This state is deliberately making health care so unaffordable that we will have no choice but to sign up for Obama care. Corruption in a different suit.


  66. - reformer - Thursday, Jun 21, 12 @ 1:37 pm:

    Social Security and Medicare have serious financial issues, too. But most everyone agrees it would be unfair to change the rules for current retirees or for those on the verge of retirement.

    Even Congressman Ryan proposes to change Medicare only for those under age 55, so those over that age don’t get hit when it’s too late for them to plan.

    When it’s public employees, by contrast, there is no such consideration given to retirees or to those on the verge of retirement. Instead the “reformers” take away their benefits without blinking an eye.

    Why the consideration for one group of retirees, those on Social Security and Medicare, but not for others, those on state pensions?


  67. - Are you serious right now - Thursday, Jun 21, 12 @ 1:37 pm:

    “===If you are not paying anything for a premium, that is free. Co-pays and deductibles are not part of that equation.===”

    Hey Bfro? My current salary is less than your insurance premium. You, as a self employed person, chose your profession with monthly salary way way way out of my reach but you planned accordingly based on your pay and maybe you can afford the $2,500 in healthcare. When one is hired into State government (with such low salaries) with the agreements that was made as to the pension and health insurance benefits, one plans accordingly. To change that agreement even a little can destroy a single parent with dependents. All of you think about the hundreds of thousands of us low income retirees and don’t put us in the same class as all of you greedy politicians. It won’t hurt you a bit.


  68. - . - Thursday, Jun 21, 12 @ 1:38 pm:

    .


  69. - IDiOT For 35 Yrs - Thursday, Jun 21, 12 @ 1:42 pm:

    I’ve read the posts here with considerable interest and have a couple of observations to make. First, to those posting about your insurance payment plan I ask if you were aware of the rules when you accepted employment or did they change after you retired? Secondly, I take issue with Mr. Miller’s statement that the rules change all the time between seasons. That’s true but, those of us who are retired aren’t between seasons we’re in the middle of the game! I don’t believe I know of any instance in any professional sport where the rules changed in the middle of a game to the advantage of one team or to the adverse impact of the other. I truly hope the courts rule on the ex post facto situation of the law as passed and signed.


  70. - RetiredStateEmployee - Thursday, Jun 21, 12 @ 1:53 pm:

    == ===The rules are now being changed after the game has started. ===

    Sometimes, rules get changed between seasons. ==

    Not that I agree with the analogy, but they don’t change the rules of the game retroactively. The record books don’t reflect the rules of the current season. They reflect the rules in effect at the time.


  71. - BehindTheScenes - Thursday, Jun 21, 12 @ 2:15 pm:

    Way back in college, in a Business Law class, I was taught that a contract has two essential parts in order to become a contract: Offer and Acceptance. When I went to work for the State, they Offered paid health care if I worked at least 20 years. I Accepted and worked for 25 years and retired. The State has breached that contract by taking away the health benefit. No one ever said the contract was changeable on a whim of if the State failed to hold up their end of the deal.


  72. - Rich Miller - Thursday, Jun 21, 12 @ 2:18 pm:

    ===I was taught that a contract has two essential parts in order to become a contract: Offer and Acceptance. ===

    Infinitely perpetual contracts aren’t valid unless otherwise specified in the constitution.


  73. - Wood Worker 2001 - Thursday, Jun 21, 12 @ 2:22 pm:

    It’s hard for me to understand how a public sector worker can complain about this. They should take note of what their costs would be if they worked in the private sector. A few have commented about their “free health care costing them 3 grand”. As a private sector retiree not on medicare, I pay $7,200 per year in premiums, and that’s before the $5,400 deductible. So I get pay $12,600 before any insurance benefits kick in. It’s amazing to me that public sector workers want more and more rather than realzing the good deal they have, even with a little bit more cost to them. If my taxes go up any more because of these costs, I will move out of state. Fortnately, I have the means to do so as a retiree.


  74. - Yellow Dog Democrat - Thursday, Jun 21, 12 @ 2:48 pm:

    If, in fact, this bill affects the future health benefits of sitting judges, I believe its unconstitutional.

    Separation of Powers, Baby!


  75. - Anyone Remember? - Thursday, Jun 21, 12 @ 3:03 pm:

    Cook County Commoner
    Article VI Section 9 of the Illinois Constitution of 1970 says:
    “Circuit Courts shall have original jurisdiction of all justiciable matters except when the Supreme Court has original and exclusive jurisdiction relating to redistricting
    of the General Assembly and to the ability of the Governor to serve or resume office. ”

    So, following the Constitution of 1970, exactly how does the judiciary recuse themselves from this case? Do we take bids to “rent” judges from another state, and the lowest bid?


  76. - RNUG - Thursday, Jun 21, 12 @ 3:05 pm:

    Rich,

    Actually, we do know the upper limit of the savings. The State claims the total spent on retiree health insurance is $800M. So the savings is somewhere between $0 and $800M, probably towards the lower end for now … because they don’t want to scare us into keeping the 3% COLA when the next bill passes.


  77. - RNUG - Thursday, Jun 21, 12 @ 3:10 pm:

    Anyone Remember,

    Previously, when ruling on their own cases (such as the pay ‘reduction’ that was resolved as a separation of powers issue), the IL judiciary has simply acknowledged the conflict while stating the issue falls within their preview, and then proceeded accordingly.


  78. - Yellow Dog Democrat - Thursday, Jun 21, 12 @ 3:12 pm:

    Caveat: The Constitution prohibits “salaries” of sitting judges from being diminished. Whether judges consider health care benefits after retirement to be salary (”compensation for work performed”) is a legal question I don’t know the answer to.

    It certainly SEEMS to be, especially since health benefits for current and retired employees are negotiated along side other compensation, but I’m not familiar with the case law on this one.

    Schnorf?


  79. - titan - Thursday, Jun 21, 12 @ 3:13 pm:

    @Concerned Citizen - if I recall correctly, “ex post facto” only technically applies to criminal laws. There is a similar concept for other laws under the general category of “due process” but it is not nearly as iron clad in its application.


  80. - Yellow Dog Democrat - Thursday, Jun 21, 12 @ 3:20 pm:

    To me, the bigger problem is not legal but moral.

    Even IF the state has the legal power to reduce health benefits for retired state workers, is it moral? Politically, is it “fair” in the eyes of voters?

    I’ve always counseled candidates that as long as you’re right on voters’ #1 issue, you can be wrong on all the rest and probably still get their vote. Conversely, if you are wrong on their #1 issue, the rest of your platform is Moot.

    Well, my bet is that for a lot of state workers — retired or soon to retire — this just became their number one issue. And when they talk about it to their family and friends…which they will…its gonna come out sounding awfully unfair.

    Especially if they close their sentence with “While voting to give hundreds of millions in tax breaks to just two Chicago corporations.”

    AFSCME is gonna have a busy, busy summer.


  81. - RNUG - Thursday, Jun 21, 12 @ 3:24 pm:

    Titan,

    Right on ex post facto. As you said, due process is iffier since contract law depends on the specific wording and conditions.

    But as I see it, the key question actually revolves around employment and pension law:

    Is the health insurance after 20 years of service an earned benefit considered part of deferred compensation or is it a gift given to the retiree by the State?

    This question has never been clearly answered in Illinois courts at the State level. Other state’s courts have ruled on both sides of the question. I could make arguments both pro and con, but my opinion doesn’t count. I suspect we’re going to find out a court’s answer in the near future.


  82. - democrat Grrrl - Thursday, Jun 21, 12 @ 3:28 pm:

    Yet another reason to support Obamacare.


  83. - RNUG - Thursday, Jun 21, 12 @ 3:42 pm:

    democrat Grrrl,

    Did you know the State has been taking money (which ends in 2014?) earmarked under ACA to pay the State to maintain early (pre-65) retiree health insurance? Except the law doesn’t require the State to spend it on that, just some kind of health expense. Now the State wants the retirees to pay for part of the insurance that ACA is helping to pay for.


  84. - redeft - Thursday, Jun 21, 12 @ 3:50 pm:

    There are many state retirees who will never be eligible for Medicare. Just as the state chose not to have employees pay into social security (and thus making them ineligible for social security benefits), it chose to not have state employees pay into Medicare. The federal law changed in 1986 and folks hired after 1986 will have Medicare, but I know many who worked their entire lives in state employment and their only health care is the state plan. Many of these folks have pre-existing conditions and would not be insurable on the private market (although if Obamacare is uphelp, they would be insurable in 2014, but not now). The state in effect deprived them of the right to participate in Medicare–will CMS consider that in setting rates? Will that be considered if the “trade COLAs for health care” plan is enacted?


  85. - Emily Booth - Thursday, Jun 21, 12 @ 4:02 pm:

    The state of Illinois received federal funds for early retirees under the Early Retiree Reinsurance Program which will provide some savings to the state. The reimbursement continues thru 2013 when the insurance exchanges become mandatory.

    Does Quinn’s timing on SB 1313 have anything to do with the Supreme Court hearing on ACA this week?

    I really don’t see how currently employed people or private pensioners can compare their financial situations to a state employee. When the Rule of 85 was enacted, it provided for free health insurance after 20 years. It was an inducement to leave. Retirees did their financial planning based on this law. I don’t see how retirees will be able to find work in today’s economy to pay for their premiums. I just don’t see it happening.


  86. - Scottish - Thursday, Jun 21, 12 @ 4:05 pm:

    Illinois has not received cash under ACA for pre-65 healthcare, so they have not been “taking money” and now having retirees pay also. Let’s not include facts here that aren’t factual. Also, let’s not forget that non-Medicare employees have the enhanced pension formula and the savings during their entire career from not paying the extra 7.65% FICA tax. No one ever mentions the fact that non-Medicare pensions are much much higher than those with Medicare. I would hazard a guess that the extra pension could more than pay for higher non-Medicare premium.


  87. - Yellow Dog Democrat - Thursday, Jun 21, 12 @ 4:14 pm:

    @RNUG -

    I suspect it’ll take some tricky legalese to argue that retiree health benefits are anything other than compensation for services rendered.


  88. - AC - Thursday, Jun 21, 12 @ 4:36 pm:

    Increasing the copays, and requiring future retirees could have yielded significant ’savings’ without a court battle. Sometimes I wonder if the real goal of the current crop of legislators isn’t to see how much legislation can make it to the state supreme court. Maybe the newfound cooperation between Quinn and Madigan was really the result of a bet on how many unconstitutional pieces of legislation they could pass?


  89. - Demoralized - Thursday, Jun 21, 12 @ 4:44 pm:

    AC:

    The increased co-pays are coming . . . you just haven’t seen them yet. Don’t think that this is over for any of us yet.


  90. - kimocat - Thursday, Jun 21, 12 @ 5:20 pm:

    AC — The same thing occurred to me. If they really just wanted to save money, it would have been easy to just make the insurance more lousy — huge deductibles, etc. And they could have stopped any existing employees from ever reaching the 20 year threshold. That is all clearly legal. But no, they go chopping benefits that people have already earned. It is particularly galling to have them apply a penalty in their formula to hit ERI folks that now have NO ability to work longer in their state jobs. Perhaps the state should have to give back all the thousands that the early retirees paid to “buy” the years for the benefits that are now being stolen.


  91. - Bigtwitch - Thursday, Jun 21, 12 @ 5:57 pm:

    if memory serves, SERS has stated since 1999, at least, that insurance was not a guarenteed beniit.


  92. - Alegra - Thursday, Jun 21, 12 @ 6:58 pm:

    re Scottish @ 4:05. I myself received a letter from CMS back when the Fed ACA $$ started being paid to Illinois to advise me of such. I beleive that it did say that they were not required to use it to help pay my (under 65-retiree) health ins premium though. So it is/or was, indeed factual.


  93. - just asking - Thursday, Jun 21, 12 @ 7:13 pm:

    I think we retirees probably should take some hit on this but the big unknown now is how much are they going to do. Also, it is my sense that the health care we were granted probably has no particular contractual protection. BUT, how many times can they change things? The proposal to choose between the existing COLA and health care benefits is a super stinker. Those who contracted for the Level Payment Option made a deal at retirement which gives them an enhanced benefit up front and allows the state to dramatically cut the benefit from age 66 until death-pretty clearly a contract where the state made an offer with certain parameters including the 3% compounded COLA and got in return the benefit of a much smaller total payout to those who lived past there early 70’s. To these people the COLA was clearly material because it is a key factor in determining if they wanted to risk the decrease in benefit from 66 to death. Now if they have to choose between health care and the destruction of their previous COLA contract, that ain’t right. The fact that the health care is no longer free becomes just the extra kick in the teeth. If all this is ok, what will be the next “contractual choice” offered and is there anything that they couldn’t do. There is a fiscal disaster and reasonable things like the premiums adjustments are ok with me but they can’t be allowed to continually grab chunks of the benefits by calling it a choice. Shouldn’t our answer come with our votes?


  94. - park - Thursday, Jun 21, 12 @ 7:31 pm:

    this is the price for all those medicaid add-ons and other programs (e.g. free rides) since 2002.


  95. - RNUG - Thursday, Jun 21, 12 @ 7:56 pm:

    Scottish @ 4:05,

    Yes, the State has been receiving payments as described under ACA and I have a letter from the State saying so !!!! It was a legally required notification under ACA …


  96. - RNUG - Thursday, Jun 21, 12 @ 8:37 pm:

    YDD @ 4:14,

    That’s my opinion also … but until the courts agree with us, it’s just opinion.


  97. - wishbone - Thursday, Jun 21, 12 @ 10:39 pm:

    “…that’s why many state and university workers stay.”

    They stay because there are no other jobs available. How about a little honesty here.


  98. - Emily Booth - Thursday, Jun 21, 12 @ 10:45 pm:

    @ Scottish, we have a transparent federal and state government. It’s all online if you care to look.


  99. - Little Egypt - Friday, Jun 22, 12 @ 12:54 am:

    What is so aggravating about all of this is that the legislators are continuing to kick this can down the road. They are not making the necessary payments out of the State budget to the pension system. Instead, they are claiming this is pension reform by saddling retirees with a bill for something they were promised they would not have to pay. It’s an election year and nothing substantial will be done towards pension reform. In fact, I’m really surprised they are willing to step on the toes of so many retirees (voters) during this election year. But even in a non-election year, nothing will be done for pension reform. Nothing - until the system goes belly up. There is not a majority of any party or combination thereof who will start gnawing away at the pension debt.


  100. - Chris - Friday, Jun 22, 12 @ 6:21 am:

    “By the way, the health insurance that retirees get is not “free.” They still have to make their co-pays and satisfy their deductibles. What Quinn is referring to here is the monthly premium.”

    Oh be real. That’s like saying that a free car isnt free bc you have to pay for gas and insurance or a free house isnt free because you have to pay for utilities. The health “insurance” was free, period.


  101. - RNUG - Friday, Jun 22, 12 @ 8:11 am:

    I don’t think it will actually happen, but if there is enough of a ‘throw out the bums’ push back and grassroots (as opposed to union) GOTV effort by the teachers and all their relatives, Quinn and Madigan might have put IL into play at the national level and be responsible for IL swinging GOP this election.

    It’s going to be an interesting election season …


  102. - HereWeGo - Friday, Jun 22, 12 @ 8:30 am:

    RNUG @8:11 am - From your lips to God’s ear and everyone else’s. May this election will finally be the end of the Madigan rein. Like many others who are loyal comments and readers of this blog, I am a retired state employee who served for over 33yrs. Not that my suggestion will matter but if we have to pay for our health insurance then we should not be charged any more than what active state employees pay. Example, If an active state employee with a salary of $36K pays $190. per month then a retired state employee with a annual benefit of $36K should pay that same $190 per month. We did not cause this problem, the GA and past Governors did. Yes it needs to be fixed but not on the backs of just retirees. As others have said the Governor & the GA need to stop all pork projects and there needs to be a permanent solution where this will never be allowed to occur again!


  103. - RNUG - Friday, Jun 22, 12 @ 8:36 am:

    HereWeGo,

    36+ yrs here.

    I agree with you on the premium but that ain’t CMS plans unless the union manages to get it in the new contract.

    I’m assuming the negotiations aren’t going the way the State wants and that is why Quinn signed SB-1313 instead of continuing to sit on it, to give a bit more leverage to the State. But what do I know? I’m just an outsider now watching things …


  104. - Courser - Friday, Jun 22, 12 @ 8:50 am:

    For all of the “private sector” folks here who continue to suggest that public sector workers “should take note of what their costs would be if they worked in the private sector”, maybe you should consider what you might be paying if you hadn’t de-unionized your own workplaces and negotiated away your right to have a collective voice in your future. The menatlity driving much of this debate is based on “I don’t have health insurance/a pension/ a decent wage/etc., so no one else should have them either.” If you want to win the race to the bottom, that’s the kind of thinking that will get you to the finish line first.


  105. - Little Egypt - Friday, Jun 22, 12 @ 11:50 am:

    To Courses: AMEN! Race to the bottom is a great analogy.


Sorry, comments for this post are now closed.


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