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Iron Range steelworkers are pushing Congress to help the steel industry provide promised health and pension benefits. At a recent U.S. Senate Committee hearing, senators listened to a plea from steel companies for a bailout of what's called legacy costs. These are the costs of providing health insurance to a retired work force. Thousands of older Northeast Minnesotans are losing those benefits in the aftermath of LTV Steel's bankruptcy. Thousands more wonder if they might be next.
LTV Steel's shutdown put 1,400 Minnesotans out of work around Hoyt Lakes. Now it's hitting several thousand of the company's Minnesota retirees. Combined, about 4,000 laid-off Minnesota workers and retirees will lose company backed health insurance coverage at the end of March.
Meanwhile, LTV's under-funded pension plan is expected to be taken over by a federal agency March 31, with pension checks slashed 35 to 50 percent.
It's a double punch that's creating a great deal of distress on the Iron Range, according to the United Steelworker's Kevin Fahey.
"We've got workers, retirees, widows, who are losing their health care, having their pensions slashed, through no fault of their own." Fahey says they don't know what to do.
LTV Retiree Ed Casey says it's nearly impossible for older people to get affordable health insurance.
"We're having a hard time getting coverage for some of our people, because they have pre-existing conditions.Heart problems, cancer," Casey says. "Them people are being turned away. They got to go on some sort of risk insurance, and they can't afford it."
It's even harder when household income plunges, as it will for 80,000 LTV retirees nationwide.
"They thought they had the world by the butt, really, when they got out of there after 30 years of employment," says Casey. "And now they can't even get insurance for their kids."
State programs may be of little help. Unemployment benefits can push a person above low income guidelines for the state operated MinnesotaCare. And there's a four month wait.
LTV Retiree David Trach say some will qualify for federal supplemental insurance. But only the very poor get much help with prescription drugs.
"That's what's happening," says Trach. "There's a lot of people that are going to make decisions, that might not even get the medical care or the prescriptions that you should have to survive." Trach says it's terrible. "I think, It should be an embarrassment to the mining companies."
Some turn to county social services, but those services are intended only for the poorest of the poor, according to St. Louis County's Director of Financial Services, Shelley Saukko.
"For example, someone from LTV, who's worked many, many years for the mine, had a relatively good income," she says. As a result they "may have a cabin on the lake, in addition to the home, may have extra vehicles; may have snowmobiles," she says. "Those are all counted as assets."
Bethlehem Steel Chairman Robert Miller told senators Thursday that steel company workers are often forced to leave jobs before medicare eligibility at age 65. His company has seven retirees for every worker. That's 13,000 workers and 95,000 retirees.
Minnesota Iron Mining Association President Frank Ongaro says legacy costs are pulling badly needed cash away from steel and taconite companies.
"This can cost the industry hundreds of millions of dollars, and that has an impact on what they're able to do otherwise with that money," Ongaro says. "From infrastructure improvements, technology improvements, and itcertainly plays on a competitive advantage, or, in this case, disadvantage with imports."
But a federal bailout is not without its critics.
The president of the American Institute for International Steel, David Phelps, says legacy problems affect mostly mismanaged steel producers.
"We think it would be fundamentally unfair from a competitive perspective, for the government to bail out American corporations who freely entered into these agreements with their unions and workers," says Phelps.
And legacy costs aren't unique to the steel industry. Dan Ikenson is a Trade Policy Analyst with the Washington-based CATO Institute.
"Let's look at people who's lost their retirements and 401k's who work at Enron," says Dan Ikenson, a trade policy analyst with the Washington-based CATO Institute. "K-Mart just declared bankruptcy a few months ago and they employ more people than the entire steel industry. So what is so special about steelworker's health benefits?"
The Senate committee made no promises. One bill intended to help steel companies has been buried for months in a U.S. House committee, with little prospect of getting back out.