Illinois ends free retiree health care

Illinois joined the list of governments cutting employee retirement benefits as Gov. Pat Quinn signed legislation that requires more than 80,000 retired government employees to start paying for health insurance. The measure ends what had been free health care for most retired government workers, including state lawmakers, according to The Associated Press (AP).

The law also applies to future state retirees who will have to pay premiums for their health insurance. Rates will be negotiated with unions and approved by a legislative commission.

The legislation covers state employees, university and community college staff, judges and legislators. Previously, the state paid health insurance premiums for employees with a certain number of years’ service, with retirees only paying co-pays and deductibles.

Free health care after retirement had been a benefit promised to Illinois government workers, but it is a perk the state says it can no longer afford. “I have a lot of compassion for those people who retired anticipating a certain benefit that now may be changed somewhat,” Senate Minority Leader Christine Radogno said in a release issued by the governor. “Having said that, this is a step Illinois must take to right the financial ship.”

 State officials have already trimmed other retirement benefits, including in 2010 reducing pension benefits for future government employees. Quinn and the legislature are negotiating over a plan to cut pension checks for current workers and retirees. The state faces an estimated $83 billion gap in pension funding.

Other state and local governments have also cut retirement benefits. New York, California, Illinois and Iowa enacted pension reform measures. Voters in the California cities of San Jose and San Diego recently approved cutting retirement benefits for both future and current employees.