Rauner wants lawmakers’ help to cut state workers’ health insurance by $470 million

Feb. 17--For the fourth time in as many years, Republican Gov. Bruce Rauner has pointed to state workers' health care as a way to save money, but this time he's asking lawmakers to help him get it done.

The governor's budget proposal unveiled Wednesday calls for cutting $470 million spent on public worker health insurance, an idea unions and the courts have blocked before.

This time, Rauner is asking the General Assembly to change the law that requires health benefits for public workers be negotiated through collective bargaining. It could be a tall order, though, as Democratic Senate President John Cullerton has already dismissed the idea as something that's "just not going to happen."

For more than three years, Rauner and the American Federation of State, County and Municipal Employees union have been in a contract negotiations stalemate, which has kept state workers' current health benefits unchanged.

That means state, university and community college employees have continued to receive benefits in which the state picks up 83 percent of the cost of their insurance premiums. When co-pays and deductibles are factored in, state workers pay less than one-quarter of their total health care costs, according to state data. The plan is considered "platinum plus" under the Affordable Care Act's metallic rating system that ranks plans as either bronze, silver, gold or platinum.

Rauner wants to get the state's portion of health care costs down to 60 percent, with employees paying the remaining 40 percent. He contends the state can't afford to offer a more generous health plan, given Illinois' ongoing financial troubles. Such a shift would lower the plan rankings to silver or gold, depending on how the premiums and other cost-sharing were distributed.

"We recommend right-sizing employee health insurance plans so that government compensation is more in line with what the taxpayers have who are paying for it," Rauner said in his Wednesday budget address. "State government needs to do what every employer in Illinois has done over the last 10 years: Get its health care costs under control. Taxpayers shouldn't have to pay for government health insurance policies that are richer than ones they can afford for themselves."

AFSCME Council 31 Executive Director Roberta Lynch slammed the proposal as "recycling well-worn assaults on public service workers and retirees" and said the governor was looking to the wrong people for help in righting the state's finances.

"He wants to impose unaffordably high health care costs, undermine retirement security and weaken union rights," Lynch said. "All this from a wealthy CEO who's never asked his fellow millionaires and billionaires to do their part to address our state's very real problems."

Rauner also will have a tough time persuading lawmakers to go along with the idea. Democrats who control both the state House and Senate tend to be allied with organized labor, and some Republicans who represent districts with high numbers of union households also can be reluctant to vote against those interests.

"If he wants health care savings, he needs to take charge and negotiate with the workers union," Cullerton said. "That's an executive responsibility."

In past years, Rauner has envisioned making the health care cuts on his own, and he's baked the anticipated cost savings into his budget proposals. That money has never materialized, though, because Rauner and AFSCME have never agreed to a contract.

Over the nearly three years since AFSCME's contract has been up for renewal, Rauner and lawmakers also haven't set aside enough money to pay for the health care program, so the state is about $1.7 billion behind in paying claims. And it owes more than $500 million in interest, much of it from the bills that piled up since Rauner took office, according to data provided by the comptroller's office.

Had Rauner and the union been able to reach an agreement in their contract talks over the past few years, the state might have been able to save on some of those costs.

AFSCME contends that it offered in contract talks that workers could pay 8.5 percent higher premiums than they're paying now. But the Rauner administration contends that move wouldn't save enough money.

And the offer only came after a state labor board ruled that the two sides were past the point of being able to negotiate a deal and that Rauner should be allowed to impose his final contract terms, with the union having the option to strike. AFSCME turned to a state appellate court, which blocked Rauner from imposing his contract terms while it considers the case. It is still ongoing.

In the years leading up to the impasse ruling, the two sides remained far apart on the issue, according to an administrative law judge at the state Labor Relations Board who analyzed the negotiations.

The judge found that Rauner's negotiating team "consistently indicated its need to save hundreds of millions of dollars in health insurance costs" and always pushed for a cost-sharing deal that would drop the state's share to 60 percent, while the union "consistently indicated its unwillingness to reach an agreement that resulted in employee's paychecks being significantly smaller." In its opening offer, the union pushed for a plan that kept premiums where they are and added benefits, making it more expensive for the state, the judge found.

Rauner on Wednesday cast the health insurance expenses, along with pension costs, as make-or-break issues for Illinois' finances, warning that inaction on them would mean "our finances will continue to deteriorate, our economy will remain sluggish and our tax burdens will stay high and keep rising."

kgeiger@chicagotribune.com

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