Bethlehem retirees shaken by loss of health benefits

Union, salaried workers face huge cost increases as medical plans end

February 11, 2003|By Gus G. Sentementes and Paul Adams | Gus G. Sentementes and Paul Adams,SUN STAFF

Stanley Morris never believed it would come to this.

When he retired from Sparrows Point in 1997 with 43 1/2 years of service, Morris, 68, thought he was secure with health care benefits from Bethlehem Steel Corp., which covered him and his wife at a cost of $150 a month.

But now, Morris and other retirees say, Bethlehem has turned its back on retirees of Sparrows Point and its other steel mills.

Bethlehem, which agreed over the weekend to be sold to International Steel Group Inc. of Cleveland, announced Friday that it planned to end health and life insurance benefits for retirees and dependents March 31 - a devastating blow to 19,000 Baltimore-area retirees and dependents. Many of these retirees, who spent decades at Sparrows Point, face the prospect of skyrocketing monthly health care insurance bills.

"You feel like you put in those type of years, you make an agreement with the company," said Morris, who lives in Joppa. "And now they can simply say, `That's it ... we're not going to do it anymore'?"

"My wife and I have to start thinking about how we're going to handle it," Morris said. "Our health plans will be out the window. I'll probably have to find a job."

Bethlehem said it had no choice but to terminate retiree health benefits for its 95,000 retirees and their eligible dependents. The benefits have cost the company about $20 million a month since it filed for bankruptcy protection in October 2001.

"We can no longer afford to do that," said Bette Kovach, a spokeswoman for the company. "A lot of companies have terminated their retiree obligations immediately following bankruptcy. We chose not to do that while we worked on a plan of reorganization as well as efforts to sell the company."

The action will hit union and salaried retired workers alike, erasing life insurance, prescription drug benefits and medical coverage that supplements Medicare or is the only insurance perhaps for those under 65.

Raymond H. Glock, 70, who put in 40 years at Sparrows Point and retired as a crane millwright, expects to pay a lot more than the roughly $70 a month he has been paying. Glock has asbestosis and colon cancer, which is in remission, and his insurance covers tests and medication for the cancer.

"They promised us all this and then they renege on their promises," Glock said. "We all got asbestosis, all kinds of diseases."

Eighty-one-year-old Lewis Sensenbach ended his 42-year career as a Bethlehem shipyard accountant before April 1984, which means his employer-paid prescription drug benefits are slightly more generous than the plan offered to those who retired after that date.

Bethlehem Steel picks up 80 percent of drug costs - no small amount considering that many new drugs can cost hundreds of dollars for a month's supply. "When you get older, medicines are required to keep you alive," said Sensenbach, one of the roughly 27,000 nonunion Bethlehem retirees.

In good health

While Sensenbach enjoys good health, he worries about the future and what might happen to former colleagues who can't afford to lose their benefits.

The steelmaker's bankruptcy and recent sale has left Sensenbach sad, but not bitter, about what it will mean to his finances. "We were proud to be employees of Bethlehem and certainly there were mistakes made, but I'm not here to blame anyone or any group of people," he said.

Representatives of retiree groups expect to meet with Bethlehem officials tomorrow in an attempt to win an extension of the termination date to May 31, said Bruce E. Davis, a lawyer for the Retired Employees Benefits Coalition (REBCO), which represents retired salaried workers.

Davis said that several insurance companies are bidding on a replacement health care coverage package. The goal is to find one that offers comparable benefits at premiums that are only a little higher than what many retirees pay now.

Those who face the steepest increase are salaried workers who retired before 1985 and pay about $6 a month in premiums, Davis said. They could be looking at $200 a month per person, he said.

Some relief could come in the form of a union-negotiated trust to help cover health care costs for retirees.

ISG, which bought and reopened the steel mills of the defunct LTV Corp., and the United Steelworkers of America union reached such a deal with retirees of LTV's mills. Both union and ISG officials said a similar trust is being explored in Bethlehem's case.

Some unionized employees still punching the clock at Sparrows Point feel as if they have labored for decades under stiflingly hot, dangerous conditions only to be sold out by their employer as they near retirement.

Mike Hartnett, a 47-year-old tractor trainer who started with the company 27 years ago and hoped to retire by 60, said his family had deep ties to Sparrows Point. His great-grandfather worked for Bethlehem, as did both grandfathers and his father. All have seen how years in the mills can impair their health, making health benefits critical for many.

No retiring now

"Most of us walk out of here with some type of health ailment," Hartnett said. The Dundalk father of four makes $43,000 a year. He wonders how he will juggle a mortgage, car payments and independent health coverage that could run $600 a month or more when he retires.

"Most of us will work until the day we die because retirement is no longer an option," Hartnett said. "That is what Bethlehem Steel Corp. has done to us."

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