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Illinois taxpayer costs for state workers ‘Cadillac’ health plans increase 16%

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(The Center Square) – Illinois taxpayers will be paying significantly more so state employees can have “Cadillac” health insurance coverage.

The Commission on Government Forecasting and Accountability met Tuesday in Springfield to review the fiscal year 2025 state employees’ group insurance program. According to the 2025 budget plan, the State Employee Group Health and Life Insurance program is proposed to receive more than $6.9 billion, a 21% overall increase from last year, when the program received $5.7 billion.

The state’s taxpayers and workers share in the cost of the program.

Raven DeVaughn, director of the Illinois Department of Central Management Services, said the reason for the increased cost to fund the insurance program was because of inflation.

State Sen. State Sen. Dave Syverson, R-Cherry Hills, continued to press DeVaughn and pointed out other states aren’t seeing this large of an increase.

DeVaughn admitted that the reason Illinois’ increases are larger than that of neighboring states is because the plans are “Cadillac” plans.

“There’s no secret we have what we call a ‘Cadillac’ plan,” said DeVaughn. “Over the last three years, we saw traditional increases of between 5-9%. This year, between mandates from the General Assembly and our carriers, coming in at nearly 40% increases. Those are unheard of numbers. It has been consistent across our carriers. An extremely large increase across the board when it comes to state of Illinois coverage.”

Illinois taxpayers are paying for a 16.5% increase. Syverson said that state-enacted mandates have consequences.

“When we continue to push these mandates, there’s a cost to that,” said Syverson. “If we’re seeing a half a billion dollar increase, 16%, compared to all of the surrounding states that aren’t any different than we are, that saw single digit increases [due to inflation], clearly it’s an indicator of what the actions of this legislature has done with the mandates.”

Syverson also pointed out the financial consequences of growing the government. In the past two years, the state employees’ group insurance program has grown by 6,000 individuals and dependents. This means more active members have been added to an insurance program the taxpayers partially pay for.

Syverson said the program is seeing such a large increase in cost partially due to legislative mandates.

“Those mandates are not just increasing the cost to the Illinois taxpayer for this plan, but it means every small employer in Illinois is being hit with those same mandates and are feeling those same pains we’re feeling right now,” said Syverson.

Syverson asked about the slew of mandates coming down the line for this legislative session. Kari Wolfe, Central Management Services’ director for the Bureau of Benefits, said her office does a financial analysis on bills when they’re sent.

“There are some [bills] we have provided information on that are quite costly,” said Wolfe.

The proposed Healthcare Protection Act would target utilization management and ban step therapy. Gov. J.B. Pritzker has touted this proposed law.

Used in the state employee group insurance program, utilization management is when providers use evidence-based criteria to determine the appropriateness of issuing benefits.