Government Forecasting and Accountability (CGFA) Issues Report on State Employee Group Insurance

The report focuses on the growing cost to taxpayers of the health insurance policies purchased by the State on behalf of State employees and retirees. The State Group Health Insurance Program (SEGIP), like all facets of U.S. health care, is affected by growing American health care costs. These costs include not only new treatments and technologies, but also the growing tendency of health care providers to practice strategic cost-shifting. Conscious of their duty to provide care to all patients, including patients without means or whose care is covered by charity-care programs such as Medicaid, health care providers often move facets of the overall cost of health care around. The State of Illinois is one of the entities affected by these cost shifts.

CGFA staff estimates the cost of SEGIP to be $3.023 billion in FY19, the fiscal year that will end on June 30, 2019. With continued increases in U.S. health care costs, the cost of SEGIP is anticipated to increase to $3.130 billion in the approaching fiscal year, FY20. Continued efforts at the containment of costs upon State taxpayers from this expensive program have minimized some facets of this increase. SEGIP beneficiaries are being required to make higher copayments, and are being subjected to various care wait-times and other care features familiar to patients throughout the United States. The overall SEGIP increase from FY19 to FY20, in percentage terms, will be only 3.5%. However, because of the great size of this program, even this comparatively modest percentage increase will exact an additional cost of $107 million anticipated additional dollars upon the hard-pressed State budget.

The CGFA report on SEGIP and its costs represents one facet of the General Assembly’s ongoing nonpartisan attempt to maintain lawmaker understanding of the overall budget pressures facing Illinois.

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