Bill to rein in state health care costs killed in the Senate

Mailee Smith

Staff Attorney and Director of Labor Policy

Mailee Smith
/ Labor
April 27, 2018

Bill to rein in state health care costs killed in the Senate

Senate Democrats killed a chance this week to rein in government spending, instead siding with government unions that prioritize their own power over the fiscal health of the state. Illinois taxpayers pay nearly $15,000 per state worker in health care costs alone under the most recent contract with the American Federation of State, County and Municipal Employees.

Illinois has a spending problem. State spending grew 25 percent faster than Illinoisans’ personal incomes from 2005 to 2015, in per capita terms.

Yet Illinois Senate Democrats killed legislation on April 23 that would help rein in government spending.

The bill, introduced by Senate Republican Leader Bill Brady, R-Bloomington, would have given the state more leeway in collective bargaining with government worker unions, while still providing generous health care benefits to state workers.

Under Brady’s bill, state workers would never pay more than 40 percent of the total cost of their health care coverage without agreement from their union. In exchange, the state would not be required to negotiate with government worker unions over health insurance, as long as the costs stayed at 40 percent or below for the workers.

To put that in perspective, state workers represented by the American Federation of State, County and Municipal Employees receive platinum-level health insurance under the language of their last contract. Those workers pay just 23 percent of the cost of their health care plan, which provides a level of coverage so generous that the state’s health care exchange stopped offering platinum-level plans to individuals in 2016. Meanwhile, taxpayers subsidize a whopping 77 percent of the average AFSCME worker’s health care plan, which costs the state $14,880 a year per worker.

If state workers paid 40 percent of the cost, taxpayers would be subsidizing $11,600 per worker annually – still a significant amount by any standard.

But the proposal drew ire from Illinois’ government unions, which hold excessive power in the state and want to keep it that way. That likely fueled the decision of union-friendly lawmakers to kill the bill. In fact, the Democratic supermajority in the Senate didn’t even give the bill a chance to be heard, choosing to keep it in the Assignments Committee and effectively killing any chance for debate.

These actions further highlight Illinois as an outlier when it comes to collective bargaining reform. Illinois has some of the most unfair laws in the region when it comes to negotiating with government worker unions. That, in turn, drives up the cost of operating government.

And that cost is passed on to taxpayers.

Every one of Illinois’ neighbors has attempted to rein in government costs through collective bargaining reform. But not Illinois.

For example, most of Illinois’ neighbors have taken steps to limit what can be negotiated with government worker unions. In Wisconsin and Iowa, most government worker unions can negotiate over base wages only. Other provisions – like health insurance or overtime pay – cannot be negotiated. Similarly, Indiana and Michigan place limits on what can be negotiated in teacher contracts.

And then there is Illinois. Virtually all subject matter related to a government worker’s employment is open to negotiation – including provisions as minute as school calendars or start times. And that drives up costs, inhibits government flexibility and bogs down the negotiation process.

Brady’s bill would have helped put Illinois more on pace with surrounding states by simply removing health insurance coverage from the field of collective bargaining negotiations.

Instead, the actions of Senate Democrats to kill the bill keep Illinois trailing its neighbors in terms of collective bargaining reform, and confirm their willingness to allow continued government union power over the state.

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