The Coal Miners' Collapsing Medical Kitty

Dixie Woolum buried her husband, Jimmy, just three months after he retired from the coalfields near their home in Cinderella, W. Va. After 45 years in the mines, Jimmy wound up with black lung disease, lung cancer-and a promise: As a member of the United Mine Workers of America, he was entitled to lifetime health care for himself and his family. "He said if anything ever happened to him, we'd be taken care of," says the 72-year-old widow.

So much for promises. As early as Mar. 1, the 118,000 UMWA retirees may receive a letter telling them that their health cards aren't worth the plastic they're made from. Why? During the past 10 years, annual medical claims have doubled, to 1991's total of $243 million. But the number of companies contributing to the UMWA retiree benefit fund has dropped from about 2,000 in 1950 to 300 today.

The letter is set to go out because the UMWA's most recent legal maneuver failed. The union had sued contributing companies, demanding that they double contributions to help pay off the $124 million in unpaid retiree medical bills. But on Feb. 13, a federal judge in Washington, D. C., refused to order the payments.

Now, the UMWA is appealing to another authority: Congress. The union is pinning its hopes on legislation introduced in November by Senator Jay Rockefeller (D-W. Va.) that would spread the retiree-benefit cost among both union and nonunion companies. Rockefeller's proposal: An industrywide levy of 75 per hour worked, which would be paid directly into a new retiree-benefit fund. Rockefeller and a supporting cast of pro-union, coal-state senators are trying to append the plan onto the Democratic tax bill that the Senate Finance Committee begins drafting on Feb. 25.

The Rockefeller proposal is bound to set off a brawl. Rockefeller's opponents are vowing not to let the coal-company tax slip by. "This is some of the most ludicrous legislation we've seen come down the pike in a long time," says a spokesman for Sun Coal Co. in Knoxville, Tenn. If Congress doesn't act to bail out the funds, counters UMWA President Richard Trumka, he'll "pull out all the stops"-including staging massive strikes by coal miners.

RENEGING? The $22 billion coal business isn't the only U.S. industry stuck with this problem. More than 5 million retirees now rely on company-sponsored health plans for medical coverage, and 40% of them are too young to be converted to medicare. Some companies, such as aerospace supplier GenCorp Inc. in Fairlawn, Ohio, and General Motors Corp. have tried hiking retiree co-payments, hoping to offset the expense of providing coverage. But that landed both companies in court, defending charges that they had reneged on coverage promises. The cases are pending.

For retired miners, the benefits shortfall has been exacerbated by profit problems in the coal business. Members of the Bituminous Coal Operators' Assn. (BCOA), the industry's primary collective-bargaining group, have long paid UMWA retirees' medical bills as part of their national contract. But overproduction of coal, resulting in big price declines, prompted many companies to work outside the national contract, shrugging off the UMWA retiree liability despite binding agreements to pay into the fund. Forty years ago, when UMWA hero John L. Lewis signed the benefit pact with the BCOA, that group represented 80% of the industry. These days, it's 30%.

For retired miner Homer Eckley of Cadiz, Ohio, the issue is vital. A UMWA member, Eckley retired in 1984. Four years later, as he underwent radiation treatment for prostate cancer, his employer, Youghiogheny & Ohio Coal Co., refused to pay the bills. "After 33 years working in the mines, they threw me out," Eckley laments. The UMWA fund picked up his coverage and eventually paid more than $10,000 in bills that Eckley couldn't have covered with his $407 monthly pension and medicare payments.

Eckley has more therapy to look forward to. More bills, too. "We'd be willing to fight anyone" to keep the UMWA coverage, says Homer's wife, Emily. If the funds don't become solvent, they may have to do just that--or watch their benefits blow away like so much coal dust.

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