Roy Davis, a Kouts resident who retired after 24 years from the former Bethlehem Steel mill in Burns Harbor, takes 10 different prescription drugs for heart disease and various ailments.
He was in for a shock when he went to refill two prescriptions this month.
Two prescriptions that had previously cost him $5 each now had $75 copays.
“I need them just so I can function on a daily basis,” he said. “It’s a 1,500 percent increase. How can they expect you to live?”
Davis is just one of thousands of retirees who faced greater out-of-pocket costs when they were switched over to a Medicare Advantage Plan on July 1st after ArcelorMittal workers ratified a new contract with the Luxembourg-based steelmaker. Forged out of the collapse of the steel industry in the early 2000s, ArcelorMittal took over the former LTV, Ipsat Inland, and Bethlehem Steel mills, as well as the health care plans of their retirees.
The Inland Steel mill alone has 15,000 living retirees, according to the Steelworkers Organization of Active Retirees.
Under the new contract, retirees’ health care premiums have risen 42 percent from $35 a month to $50 a month, or from $70 a month to $100 a month for retired couples. Deductibles increased from $250 per family under the old company plan to $322 through Medicare. And maximum copays shot up from $600 a year to up to $2,500 a year for married couples.
“This is a bunch of BS,” Davis said. “This is a billion dollar company. I gave my health and my life for that mill, and this is how I’ve been treated.”
He said most of his health problems originated from his work relining ladles with heavy brick for decades.
“It’s hard on your back, your arms, your shoulders, your joints,” he said. “The bricks can weigh 10, 12, 14 pounds a piece. It’s hot dirty work.”
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Davis is on a fixed income, so he’s worried he just won’t be able to afford all his prescription medications. The two prescriptions with the $75 copays were the first he filled, so he still had eight to go and didn’t know what the copays would be on those.
“I’m just trying to live,” he said. “I’m trying not to die from a heart attack or heart disease. I need my heart medicine. I take four meds for my heart alone. I’m scared.”
United Steelworkers union officials said they got the best deal they could under the circumstances when negotiating the contract last year and into this one. Last year was when foreign imports grabbed a record 29 percent market share. There have been 19,000 layoffs of steelworkers and iron ore miners nationwide.
Steelworkers Organization of Active Retirees, or SOAR, had made several demands during bargaining, such as that health care premiums remain untouched and coverage get extended to surviving spouses who were married after retirement, SOAR Secretary Don Lutes said.
ArcelorMittal USA CEO John Brett said in a recent blog post the company had to contain health care costs, which totaled $250 million for active employees last year, and nearly as much for retirees. That was a 7 percent increase compared to 2014 and a 42 percent increase compared to 2009.
Under the new contract, the steelmaker will stop paying $25 million per quarter into the Voluntary Employee Beneficiary Association trust, which pays medical benefits for retirees of legacy companies like ISG and Ispat Inland. The balance in that trust is now about $600 million.
ArcelorMittal won’t pay any more into that fund until 2018, and then it will only contribute 5 percent of its earnings before interest and taxes each quarter. In 2015, retiree health care benefits cost ArcelorMittal more than $225 million, Brett wrote in the blog post.
Under the new labor pact, ArcelorMittal retirees are shouldering more of the cost with the first premium increases since 2008, and the federal government will be picking up a bigger piece of their health care tab through its Medicare program. The new contract ends employer-sponsored retiree health care for new hires altogether, and instead deposits $0.50 per hour worked into a 401(k).
“Mitigating the exponential rise in health care costs was essential for the sustainability of our company moving forward,” Brett wrote.