Illinois health insurance costs are set to climb again next year, putting more pressure on the state budget and raising expenses for state employees.
Officials from the Department of Central Management Services (CMS) told lawmakers Tuesday that total health plan costs are projected to jump by $380 million, or 9%, in fiscal year 2027, reaching an estimated $4.6 billion. While this is a slightly lower rate of increase than recent years, it still represents a substantial hike.
The average cost per participant is expected to rise 8.3% to $12,051, up nearly 46% since 2018. CMS Director Raven DeVaughn attributed the increases to general inflation in healthcare and a growing state workforce, which now covers about 470,000 employees, retirees, and dependents.
The state’s general revenue fund will shoulder most of the increase, with costs rising 12.8% to $2.8 billion. Member contributions will also go up by $30 million, or 4.9%, totaling $637 million. Premiums for employees will rise by $8 per month and by $4 per month for each dependent in both fiscal years 2026 and 2027, per current labor agreements.
Other funding sources include the road fund, which will decrease 10% to $155.5 million, and university funds, which will remain stable at $45 million.
Overall, the rising health insurance costs highlight ongoing financial challenges for both the state and its workforce, driven by broader healthcare inflation and an expanding number of people covered by state plans.