SPRINGFIELD, Ill. (CBS) — Illinois’ 78,000 state government retirees could lose their free health care benefits, under a measure headed to the full Illinois House for consideration.

The proposal, Senate Bill 1313, would require those employees to start paying health care premiums. A smaller number of retired state workers, about 7,400, already receive a health care subsidy based on how many years they’ve worked. That, too, would be stripped and renegotiated.

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An amendment proposed by House Speaker Michael Madigan (D-Chicago) would allow the state’s Central Management Services to decide how large a subsidy, if any, the state will give employees in the pension system on an annual basis. This applies to all state retirement systems and to all employees, regardless of when they retired. Another forthcoming amendment would force CMS to treat pension systems covered by union negotiating the same as those without.

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A majority of Teachers Retirement System members and community college employees are in their own health care system, and wouldn’t be affected.

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“My view of this is that this is an early step, a significant step and a step that we clearly ought to take, if for no other reason, to set the tone for budget making over the next 30 days,” says Madigan.

A House analysis of the bill indicates each retiree who pays no health care premium will cost the state $7,388 in Fiscal Year 2013. That totals $876 million over the entire year.

“It’s part of this whole crowding out issue where you’re going to see us cut the budget also by a minimum of $1 billion this year, because of pressures like this,” says House Minority Leader Tom Cross (R-Oswego). “If you want a sustainable system, we’re not saying you’re not going to have health coverage, but you’re going to have to pay something for it.”

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Cross and Madigan predict the bill will be called before the full House sometime next week.