Illinois State Employee Health Costs to Rise 9% in Fiscal Year 2027
Illinois state employee health insurance costs are projected to rise 9% in fiscal year 2027, adding $380 million to the state's budget as the workforce grows and healthcare inflation continues.
State employee health insurance premiums expected to increase $380 million next year
SPRINGFIELD — Illinois state employee health insurance costs are projected to jump by 9%, or $380 million, in fiscal year 2027, according to officials from the Department of Central Management Services.
The increase would bring total expenses paid by all funding sources to about $4.6 billion for the state's health insurance system.
CMS Director Raven DeVaughn told a legislative panel Tuesday the increases are due to several factors, including growth in the state's workforce and general inflation in the healthcare industry.
Since 2019, the state has added about 10,000 employees to its workforce. The health plan now covers about 470,000 lives, including employees, retirees and qualifying dependents.
"Certainly, there's the general idea of inflation that we are all just fighting through a country. We can't quite point to one specific thing that has increased our liabilities," DeVaughn said.
According to CMS data, the average cost per participant is expected to grow 8.3% next year, to $12,051. That represents a 45.7% increase over fiscal year 2018.
The state offers its employees a variety of different health benefit plans. They are funded through a combination of state funds, employee premiums, prescription drug rebates and other miscellaneous revenues.
The state's general revenue fund is the largest single source of funding, accounting about 62% of the system's total revenues. That cost is expected to rise 12.8%, to $2.8 billion in the upcoming fiscal year.
Contributions from the road fund are expected to decline 10%, to $155.5 million, while funding from university funds is expected to remain even at $45 million.
Member contributions are expected to increase $30 million, or 4.9%, to $637 million. Member contributions make up about 14% of the system's total revenues.
Premiums, which are largely a function of collective bargaining agreements, are expected to rise $8 per month for employees and $4 per month for all dependents in both fiscal year 2026 and 2027, the last year of the current labor contract.
The Illinois legislature will need to address the rising costs of state employee health benefits as part of the state's budget process for the upcoming fiscal year.