MHIP offering to insure young Beth retirees

Plan backs a bill to assist ex-steelworkers ages 55-64

Health benefit being terminated

REBCO also is offering coverage for its members

March 27, 2003|By Laurie Willis | Laurie Willis,SUN STAFF

Board members of the Maryland Health Insurance Plan voted unanimously yesterday to support legislation that would allow Bethlehem Steel Corp. retirees ages 55 to 64 to obtain MHIP insurance coverage regardless of their medical histories.

The insurance coverage would be critical to those Bethlehem Steel retirees because they are not yet eligible for Medicare, which is for people 65 and older or the disabled.

On Monday, a U.S. bankruptcy judge in Manhattan approved Bethlehem Steel's plan to terminate health care and life insurance benefits for 95,000 retirees at the end of the month as the company prepares for new ownership.

The decision will have a deep impact in the Baltimore area, where about 20,000 retirees and dependents will lose benefits in just four days.

"Certainly we're in favor of the state legislature adopting some stop-gap provisions allowing retirees to receive prescription drugs at a reduced rate or medical coverage at a reduced rate," said Billy Thompson, the United Steelworkers of America's district director for Maryland, Virginia, West Virginia and Kentucky.

Besides the MHIP vote, there was another bit of good news yesterday for Bethlehem Steel retirees. The Retired Employees' Benefits Coalition, or REBCO, an advocacy organization composed of Bethlehem Steel retirees and their spouses, announced that it will offer health, life and dental plans to REBCO members who pay dues annually, and their spouses.

That insurance will be offered through National Employee Benefit Companies Inc., a wholesale insurance company.

"We've been working on this for 12 months in anticipation of the day that Bethlehem Steel would terminate its health care and life insurance benefits," said Bruce E. Davis, general counsel of REBCO.

"We knew that when the termination date arrives there needs to be a safety net, and we have created a safety net," Davis said.

He said that nationally, about 18,000 people will be eligible for insurance through NEBCO, including about 2,000 to 3,000 people in Maryland.

Health and other benefits will be provided at more affordable rates than what's available under the Consolidated Omnibus Budget Reconciliation Act (COBRA), Davis said.

And as long as participants enroll within 30 days after March 31, they won't experience a lapse in coverage.

A major factor of the NEBCO program is that people can get insurance despite pre-existing medical conditions - just like what's proposed under MHIP's plan.

Under NEBCO, retirees and their spouses 65 or older can obtain coverage for as little as $118 per month with a generic prescription drug program. A retiree or spouse under age 65 can participate for as little as $247 a month, Davis said.

Thompson, of the steelworkers' union, declined to comment on the specifics of the NEBCO coverage, saying he lacked information about it.

Under MHIP's plan, Bethlehem Steel retirees are entitled to a 65 percent federal tax credit, as outlined in the Federal Trade Act of 2002, because their companies have been affected by international trade, said Richard Popper, MHIP executive director.

The tax credit also applies to individuals whose pension systems have come under federal oversight.

Under MHIP, monthly premiums for people 55 to 59 would be $287, a figure that drops to $100 when the tax credit kicks in. For those 60 to 64, the monthly MHIP premiums would be $308, or $108 with the tax credit.

By comparison, COBRA premiums would be $577 in both age groups, a figure that drops to $202 with the tax credit, Popper said.

MHIP insurance coverage will be offered to the Bethlehem Steel retirees if House Bill 1100 is approved by the Maryland General Assembly. It was passed on a third reader in the House on Monday, said Del. Peter A. Hammen, a Baltimore Democrat.

The emergency bill is to go before the Senate Finance Committee Wednesday. It would become effective immediately if signed by Gov. Robert L. Ehrlich Jr.

The bill, which also would add two members to the MHIP board, was sponsored by Del. Shane E. Pendergrass, a Howard County Democrat.

Hammen, vice chairman of the health and government operations committee and chairman of the subcommittee on insurance, said he used the bill as a means to "address the problems with the retirees of Bethlehem Steel losing their health benefits," by including amendments for MHIP coverage.

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