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Via My FOX Chicago
A new study forecasts that health insurance for retired state employees will cost billions of dollars more than previously thought. That makes efforts to control those costs more urgent than ever.
In most states, retired government employees pay about half the cost of their health insurance. In Illinois, though, those retirees pay less than 20% of the cost of a very rich health plan with very small co-pays. A new study — completed before Gov. Quinn’s recent cost control efforts — finds taxpayers face a staggering $56.4 billion in unfunded retiree health care costs, up from $54.2 billion estimated in 2011. One reason: state workers may retire at age 55 with full benefits.
“If you’re looking at a retiree in their 50s, the state pays more than $14,000 a year for this unheard of benefit. The retiree is paying less than $1,000,” The Illinois Police Institute’s Kristina Rasmussen explains.
For the first time ever, many retired government workers last year began to pay health insurance premiums: ranging from 1% to 2% of their annual state pension. Together with other reforms, it has reduced taxpayer costs by more than $100 million a year. But facing $80 billion in unfunded pension costs, and $56.4 billion in unfunded retiree health insurance, taxpayers here are on the hook for more than $136 billion in unfunded retirement benefits.
Analysts at the Illinois Policy Institute said reforms adopted by Democrats in Springfield don’t go far enough.
“And now looking forward we need to make some tough choices,” says Rasmussen. “It’s not fair to ask union members in the private sector to continue working — the plumbers and the steamfitters — until they’re 67 so someone else can retire in their 50s with gold-plated health insurance.”