Retirees scrambling to find health insurance

Ex-Beth Steel workers who will lose benefits are guided through options

March 23, 2003|By Gus G. Sentementes | Gus G. Sentementes,SUN STAFF

Since retiring 20 years ago from Sparrows Point, Robert E. Buchanan has been living with what he thought were financial guarantees. Chief among them: subsidized health care coverage by Bethlehem Steel Corp. that covered himself and his 80-year-old wife for just $164 a month.

But now, at age 81, Buchanan has to wade through a maze of mind-numbing information before he can make critical decisions about health coverage.

"I never thought [health care termination] would happen," said Buchanan, an Army veteran who worked in Sparrows Point's tin mill. "I'm trying to find out what I can do. If it's too much money, I think I'll drop it altogether and go through Veterans Administration. But my wife won't have access. That's what I'm mostly concerned about."

Bethlehem filed a motion this month in U.S. Bankruptcy Court in Manhattan seeking to terminate retiree health care coverage March 31, a move that has meant uncertainty for Buchanan and the roughly 20,000 retirees and their dependents living in the Baltimore area. The court is expected to approve the request tomorrow.

In search of answers, Buchanan took a bus from his West Baltimore home to the Steelworkers union hall in Dundalk last week to join more than 450 fellow retirees at a presentation on health care insurance options.

Buchanan said he's in good health and doesn't require costly prescription drugs - a key benefit for retirees because Medicare does not pay for presecriptions - but he worries about his wife, Phoebe. Though separated, they are still on good terms, and she relies on his health insurance coverage from Bethlehem.

"It's very important for her but I seldom use it at all," said Buchanan, who worked at the mill for 38 years, collecting and recycling scrap steel.

In exchange for years toiling at difficult and often dangerous jobs at the mill, Buchanan and other retirees had expected to collect a steady pension and generous health and life insurance benefits for the rest of their lives.

Since Bethlehem announced its intent to terminate the benefits, local and state officials, along with union leaders, have scrambled to get information to retirees on what to do when their coverage ends.

It was the latest blow to Bethlehem's 95,000 retirees and dependents, who learned in December that their under-funded pension plan would be taken over by the federal government and that monthly pension checks for some would be sharply cut.

Information sessions

Together, the Maryland and Baltimore County departments of aging have held nearly a dozen information sessions for more than 2,200 retirees at centers throughout eastern Baltimore County. And more are scheduled.

"I don't have all the answers, but I can give you some knowledge so that you can make an informed choice," Pat Venable, a health insurance coordinator at the county Department of Aging, told retirees last week as she began a presentation on their health care options.

Local 9477 of the United Steelworkers of America will also hold several information sessions for retirees beginning tomorrow at the Dundalk union hall.

Termination of retiree health care benefits has become increasingly common in the troubled domestic steel industry. More than 200,000 retirees and their dependents have lost their health care benefits as a result of steel company bankruptcies in the past six years, according to the union.

Bethlehem, which has operated in bankruptcy since October 2001, moved to terminate the benefits in advance of an asset sale next month to Cleveland-based International Steel Group Inc. It said it could no longer afford the nearly $20 million in monthly health care bills for its retirees.

Those who expect to be hit hardest include longtime retirees who receive small monthly pensions and can't absorb higher costs as easily.


"I feel sorry for the guy who's been retired for 15 to 20 years," said Don Kellner, who retired in 1999 and is an officer for a Sparrows Point union retiree association. "They're not making a lot of money in pension. ... Dundalk is going to be devastated."

Another group - workers younger than 65 who took early retirement and are too young for Medicare - also face significant out-of-pocket costs. About 4,400 people, including dependents, in the Baltimore area fall into that category, according to a Bethlehem spokeswoman.

To give retirees more time, the union reached an agreement with Bethlehem to allow retirees to continue group coverage for six months under the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Because Bethlehem will not continue as an operating company after the asset sale, it was not legally obligated to offer COBRA coverage.

Under COBRA, retirees pay 100 percent of the premium plus 2 percent in administrative costs. For those younger than 65, the monthly cost ranges from $406 for an individual in a base plan to $921 for family coverage, according to union figures. That is hundreds more than what many retirees were used to paying. Medicare-eligible retirees will pay less.

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