Prairie State Wire

Prairie State Wire

Thursday, January 23, 2020

Wirepoints: Illinois has 'not set aside a penny' to cover $68 billion in retiree health benefits

State Government

By Glenn Minnis | Dec 16, 2019

Insurance11

Retiree health benefits for government workers in Illinois have grown by more than 70 percent over the last decade, leaving the state on the hook for upward of $68 billion in unpaid benefits.

Analysis by government watchdog website Wirepoints finds that the state politicians “haven’t set aside a penny” toward the debt, which continues to swell and serve as a significant driver of the state’s ongoing financial woes. Part of the issue seems to stem from the state’s “pay-go” way of funding the system. 

Instead of setting money aside to cover costs, similar to what it does for its pension operations, the state has adopted a system of covering health care costs as they are incurred.


Wirepoints President Ted Dabrowski

“This practice will squeeze Illinois’ future budgets as the state struggles to pay for constantly rising pension and retiree health insurance costs,” Wirepoints predicts in a report co-authored by the organization's president Ted Dabrowski and policy analyst John Klingner, adding that state payments for retiree health insurance alone could more than triple over the next two-plus decades to as high as $4.5 billion.

To date, the state provides subsidized retiree health insurance benefits to some 567,000 public-sector workers and retirees under such programs as the State Employee Group Insurance Program, the Teachers’ Retirement Insurance Program and the College Insurance Program. With the cost of some workers' insurance benefits running as high as $500,000, as of 2018, the average Illinois household was on the hook for more than $14,000 in unfunded retiree health benefits.

“No matter how you measure it, Illinois faces an extreme retirement crisis,” Dabrowski said in a press release. “Illinois’ $68 billion in unfunded retiree health insurance only piles onto the state and local governments’ unsustainable retirement costs.”

Dabrowski said all the findings scream for just one course of action.

“Without massive reforms, retirement costs are going to damage Illinois beyond repair,” he said. “The state has no choice but to address its unfunded obligations.”

Want to get notified whenever we write about WirePoints ?

Sign-up Next time we write about WirePoints, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

WirePoints

More News