AP NEWS
Related topics

Many Retirees Losing Health Insurance

March 2, 1993

WASHINGTON (AP) _ After his success as McDonnell Douglas managing director of the Apollo moonshots, Casey Patelski turned down a job offer at another company at double the pay. He liked the fringe benefits, especially the medical insurance, at McDonnell Douglas.

Patelski, who lives in Costa Mesa, Calif., subsequently retired from the aerospace giant after being assured that he and his wife would have low-cost health insurance as long as they lived. Then, last October, he told a Senate panel today, McDonnell Douglas pulled the rug from under him.

The company announced that within two months it would end paid health insurance for retirees, offering a stopgap for only four years.

″This announcement has scared and angered me,″ said Patelski, who is battling a recurrence of his childhood polio and uses a wheelchair. If he has to pay $500 or $600 a month for health insurance, ″it really doesn’t leave me much to life on″ from his $1,100 pension, he said.

Patelski represents a quickly growing group of Americans who are learning first hand what the nation’s ″health-care crisis″ is all about. They are retirees whose promised health insurance is being eliminated or drastically scaled back as companies feel a financial pinch.

Sen. Howard Metzenbaum, D-Ohio, chairman of the Senate Labor and Human Resources subcommittee on labor, cited a finding that two-thirds of employers surveyed plan to reduce retiree health benefits and 6 percent plan to end benefits entirely.

″Absolutely shocking,″ Metzenbaum said. ″They are just taking a walk on their obligations.″

″It was right there in writing for us,″ Patelski said of his retirement health plan.

″I don’t think the company can walk away from you at this point - nor can your country,″ said Sen. Don Riegle, who heads the Senate Finance subcommittee on health.

″I don’t want to become a ward of the state,″ Patelski said.

″You shouldn’t have to,″ Riegle replied.

Riegle said skyrocketing health costs have become a back-breaker for many U.S. manufacturers. He said the price of a U.S. car includes $1,086 in health- care costs, including $383 just to cover retirees. In Japan, he said, the average is $550; for Japanese manufacturers’ plants in the United States, the average is $475.

Herman Fasching, 59, of Minneapolis, retired from Unisys Corp. in 1988, giving up 28 percent of his pension and a sizable part of his Social Security on assurance that he and his wife would be provided health insurance for life at a cost of $27 a year.

Now, Fasching says, Unisys has canceled that health plan and notified him that by 1996 he will have to pay at least $8,280 a year to insure himself until he becomes eligible for Medicare in 1999.

″My medical costs will totally exceed my pension,″ he told the panel.

Metzenbaum said McDonnell Douglas and Unisys declined invitations to testify.

AP RADIO
Update hourly