Ted was on Illinois Rising earlier this week discussing Illinois’ massive retirement crisis at the state and local level. Everybody wonders what to do about pensions, but the retirement problem is even bigger than that.
Illinois gives state workers free health insurance in retirement. In total, the state owes $73 billion in retiree health benefits, yet doesn’t have a cent set aside to pay for them.
Read Wirepoints’ full report here: Illinois’ other debt disaster: $73 billion in unfunded state retiree health insurance benefits – Wirepoints Special Report
To read more about Illinois’ $73 billion in retiree health insurance debts, see: Illinois’ other debt disaster: $73 billion in unfunded state retiree health insurance benefits
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Most healthcare “premiums” for public workers were and are ultimately paid for by taxpayers thru property and other taxes and many of those are Cadillac plans not the ACA variety as they should be. Teachers opted out of S.S. and Med decades ago (Federal programs with the ability to print money) and opted in to state programs which only has the ability to tax. Did the taxpayers have the choice to vote for this and that they are liable for these costs as long as they live in Illinois? I would like to “Opt” out of all my healthcare and… Read more »
I would think paying insurance premiums is a real “hard debt” because those bills have due dates. And are exchanged for a product in the here and now. Unlike the pension payments which are “soft debts” that are paid from an inadequate fund, but a fund no less. Soft debt will become someone else’s “hard debt” when the fund runs out. But insurance companies are selling a product and expect the bill paid.
The predictable behavior in Illinois is that the State’s political leaders will ignore the problem for as long as possible. The health care providers/insurers at some point won’t get paid, The providers/insurers will put up with it for a short period of time, expecting the State to raise taxes or borrow more money to pay them. Only after the bills become considerably delinquent will the word get out that the State cannot pay and no federal bailout is going to happen, so there will be chaos in abundance and current and retired employees will have limited or no access to… Read more »
The nominal “insurers” are more like plan administrators. They add a fee for administering claims but (except for stop loss) the insurers are not supposed to be at risk. However, the providers and the patients don’t generally realize that. Consider all the discount deals that providers make with the insurers. I think those deals are generally year-to-year. So I wonder if the insurers can walk away from liability just because the sponsoring government entity is broke. I suppose they could try to deny coverage for non-payment of premium, but aren’t hospitals (and the like) under contract with the insurer for… Read more »