Taxpayers’ pay over 2X rate Illinois workers pay for health insurance
A current union-negotiated contract with Illinois state government gives out-of-the-norm health benefits to government workers at very low cost. State workers’ share is far less than what private-sector taxpayers must spend for health coverage.
Illinois state workers get platinum health insurance but pay less than half the rate paid by the taxpayers who support those benefits.
If state workers received coverage more in line with what the private sector gets, it could save around $2.7 billion.
The average private citizen in Illinois pays 42% of their combined premium and out-of-pocket health care costs, while Illinois state employees pay only 16%.
This means private-sector workers are not only paying more for their health insurance, but they’re also covering a large portion of state workers’ health care costs with their taxes. It is deeply unfair that private-sector workers are forced to pay for benefits they couldn’t afford and would have trouble providing for themselves.
The average state worker pays $2,429 for health coverage, while the average private-sector employee pays $3,033 for a plan. This doesn’t seem like such a stark difference, until you consider the average total price of these plans come out to $7,151 for the average private-sector worker, and $12,761 for the average state worker.
In 2019, Illinois Gov. J.B. Pritzker signed a contract with the American Federation of State, County and Municipal Employees Council 31 that increased workers’ benefits and government spending. When Pritzker renewed the contract in July 2023, he added even more benefits – including a 19.3% increase in total base pay and unearned stipends of $1,200 per employee, putting taxpayers on the hook for an additional $625 million.
AFSCME Council 31’s current contract must be renegotiated before it expires in mid-2027. At that point Illinois’ projected budget shortfall will be over $4 billion, likely requiring tax increases to maintain benefits.
To prevent further shortfalls, the state must right-size state-employee health care costs. Doing so would save Illinois $897 million in 2028 alone and $2.7 billion by 2030.
Given Illinois’ precarious fiscal position – as confirmed by the Governor’s Office of Management and Budget projection of a $22 billion shortfall through 2030 – the state must reduce government spending. Right-sizing state-employee health insurance costs would enable the state to do this while providing essential savings that would ease the pressure on taxpayers.
A more balanced contract with AFSCME is clearly needed. With the passage of Amendment 1 in 2022, the state can no longer legislatively right-size union negotiated contracts, meaning even if the Illinois General Assembly were to pass a law to raise state worker contributions, it might ultimately be deemed unconstitutional. The only viable solution, it seems, is for the government to negotiate a better deal on behalf of the taxpayers who ultimately bear the costs of extravagant union benefits.
Had a fairer contract been negotiated in 2019, Illinois would have saved $3.6 billion during the past four years.
In addition to right-sizing health care costs, other reforms, such as a spending cap and consolidating school districts, are necessary for Illinois to spend more responsibly. You can read more about these and other measures to fix Illinois finances in the institute’s report, Illinois Forward 2026.