Canton Repository

June 10, 2002

Steel collapse hurts retirees 

By PAUL M. KRAWZAK
Copley Washington correspondent

WASHINGTON — After spending more than four decades laboring for LTV Steel, Raymond Rauvola figured he could depend on the company for his pension and health care during his retirement years.

He was wrong.

Rauvola’s company-paid health insurance ended March 31 after LTV, one of the nation’s largest steel companies, gave up its struggle to survive.

“My wife is diabetic and has all kinds of health problems,” said Rauvola, who lives in Canton.

Like the majority of steel company retirees and dependents, Rauvola and his wife, Mae, are older than age 65. Consequently, they have coverage from Medicare, the federal health insurance program that pays the bulk of medical costs.

Medicare, however, doesn’t pay for prescriptions, which now run almost $500 a month for Mrs. Rauvola.

While Congress debates whether the federal government should assist retirees whose former employers have bailed out on them, ex-Steelworkers and their families are learning to cope with the sudden loss of health benefits they took for granted.

Lawmakers are divided over whether the federal government should provide temporary health benefits to retirees who lost
their insurance or even assume responsibility for the health programs of failing steel companies. 

Those who favor aid argue that American steel companies failed because the government did not prevent low-priced foreign
steel imports from being illegally dumped in the United States.

Opponents counter that the proposed government aid would single out retired Steelworkers, paying for their health benefits
with tax dollars from other Americans, who in many cases cannot afford health insurance themselves.

LTV’s demise threw 18,000 employees out of work and ended retirement benefits for 85,000 former workers and dependents
in Ohio, Illinois, Indiana and other states. Altogether, more than 100,000 retirees and their families have lost benefits as 11
steel companies shut down during the last two years.

In addition to jolting its own retirees, the collapse of LTV has caused ripples of apprehension among former employees of
other steel companies that face the possibility or likelihood of going under.

Lawrence Brandenburg, for example, is nervous about losing his health insurance from Republic Technologies International, a
Fairlawn-based steel maker that is in bankruptcy proceedings. Republic has negotiated to be purchased by an investment
group in a deal that could result in the loss or reduction of benefits for retirees.

“If I lose it,” the Canton man said of his insurance, “the government’s going to have to pay my hospital bills. I don’t even make enough money to file income taxes.”

Brandenburg already is reeling from the company’s renegotiation of its contract, which he said increased the share of medical
costs he has to pay. He owes $1,600 for lung surgery in April. Before the contract change, he said, “I would not have had to
pay anything.”

Among retirees who lost benefits, the Rauvolas are better off than many. Years ago, Rauvola received a settlement to
compensate him for exposure to asbestos at the steel mill. He invested the payoff in stocks and it has grown considerably.

As a result, the loss of company health insurance means the couple will travel less and keep their cars longer.

Like other steel retirees who are 65 or older, the Rauvolas used their LTV insurance to pay for medical costs, including
prescriptions, not covered by Medicare.

Since LTV benefits ended, they have purchased a $60 a month supplementary health plan that pays for services not covered
by Medicare. It does not pay for prescriptions.

It’s a more difficult situation for some LTV retirees, such as John McAnany, who lives with his wife in Massillon.

“We’re not eating like we did,” he said. “I don’t have cash saved up.”

Since the demise of LTV, the McAnanys have paid more than $800 a month for health insurance. McAnany said the coverage
is necessary because his wife, who is two years away from qualifying for Medicare, had triple bypass surgery a year and a half
ago.

The failure of a company like LTV usually does not threaten pensions, which are guaranteed by the Pension Benefit Guaranty
Board. The federal body is in the process of replacing LTV pensions with federal pensions. In some cases, the federal pensions
will be less than the LTV retirement, especially for those newly retired.

Cash-strapped LTV threw in the towel after failing to attract a buyer. No other steel company was willing to acquire the
company because it was more than $1 billion short of what it owed to retirees in health insurance into the future.

A New York investment group acquired LTV after its dissolution and reopened it as International Steel Group. The new
company does not owe anything to former LTV employees.

Among those in tough circumstances are Selma “Sally” Bianchi, whose LTV retiree husband died 10 years ago.

As she navigates through her house on a walker, the Canton woman wonders how she will pay for 14 prescriptions she takes
for a heart condition, high cholesterol and other ailments. Her combined pension and Social Security are less than $12,000 a
year, she said.

“I called on one of the prescriptions and they quoted me $432 for 30 days. I don’t think any pills are worth that kind of
money,” Bianchi said.

Some steel company retirees are younger than 65, and when their companies failed, they typically were left with no health
insurance at all.

“That’s my biggest concern right now,” said Duane Gartrell, 57, of Carrollton. He’s worried about losing the insurance
provided by his former employer Republic. “I had kidney cancer and she (his wife) has multiple sclerosis.”

Gartrell, who was in the Army, could get medical care from the Veterans Administration. But it would not cover his wife,
whose medication would cost $1,000 a month or more without insurance.

“I’m at that age where nobody wants to hire you and I’m not old enough for Social Security,” he said. “I’m in a dilemma right
now.”