Retirees Tell of Bitter Pill : Panel Hears Ex-Aerospace Workers’ Concerns Over Health Cuts
In dramatic testimony before a Senate subcommittee, a disabled engineer who directed mission control for the Apollo moon launches said Tuesday that he feels betrayed and is “damn angry” that McDonnell Douglas Corp. has decided to scrap health benefits for retired workers.
Speaking from his wheelchair, Kazimir (Casey) Patelski, 65, accused the company of reneging on its promise to provide lifetime health coverage for himself and his wife. He retired last year after working for the firm 28 years.
“I doubt that a person like me is going to be able to obtain health insurance,” said Patelski, a Costa Mesa resident whose legs were paralyzed 18 months ago from a resurgence of the polio that he contracted as a college student.
“I simply do not know what the long-term outlook is on my medical condition, but it doesn’t take a rocket scientist--which I happen to be--to realize that I am going to have continuing medical costs,” he told a hearing of the Senate Labor subcommittee on human resources. “I’m upset and I’m damn angry they’ve gone back on their promise.”
The firm’s behavior “besmirches the entire corporate world,” said Sen. Howard Metzenbaum (D-Ohio), who threatened to lead an effort to cancel the giant aerospace firm’s government contracts. McDonnell Douglas is the nation’s largest defense contractor.
Metzenbaum and other senators at the hearing--including Democrats Donald Riegle of Michigan and Paul Wellstone of Minnesota, and Republican James Jeffords of Vermont--became indignant after hearing Patelski’s story.
They say the problems of retirees will give an added boost to the push for health care reform--a high priority for President Clinton.
McDonnell Douglas and many other major companies have moved to curtail or eliminate retiree benefits in response to a new accounting standard requiring them to take a charge against earnings for the future costs of health care.
McDonnell Douglas has already recorded a charge of $942 million, but saved an additional cost of $676 million by deciding to shut down the health benefit program in four years.
The company will pay the insurance premiums for retirees through 1996--about $18,000 a person for 20,000 former non-union salaried employees, including 8,000 in California and other western states.
The firm “tried to balance the needs of retirees against the needs of the corporation,” McDonnell Douglas spokeswoman Barbara Anderson said at the corporation’s headquarters in St. Louis.
The retiree health plan “was no different from the plans of most companies,” she said. “We reserved the right to modify or amend or terminate the coverage at any time.”
The McDonnell Douglas retirees are among a relatively small group of Americans eligible for health care coverage apart from the universal Medicare program. Only 16% of people over the age of 65 receive health care benefits from a previous employer, according to Alan Peres, manager of benefits planning for Ameritech, a holding company for Midwest phone companies.
“The vast majority of companies in this country never had and have no intention of providing medical benefits for former employees,” he said at the hearing.
McDonnell Douglas declined Metzenbaum’s invitation to testify at Tuesday’s hearing because it is being sued by a group of retirees over the issue, and “we thought it would be inappropriate to provide public testimony on the topic,” Anderson said.
After 1996, the plan will be ended and the retirees will be responsible for their own coverage. Patelski, who has an $1,800-a-month pension and $1,000 a month in Social Security benefits, is now eligible for Medicare.
But, he said, the federal program probably will not cover the costs of a new set of $6,000 locking braces he will need, or a new motorized wheelchair that he will require when his arms become paralyzed and can no longer propel a wheelchair.
Patelski was a design and project engineer at McDonnell Douglas for aircraft, missile, rocket, space station and satellite programs.
“I designed the consoles, wrote procedures, briefed astronauts and manned the flight consoles for Earth orbit and flight to the moon of the Saturn rocket and Apollo spacecraft,” Patelski said.
The retired engineer is also worried about his wife, Bonnie, who is 55 and 10 years too young to qualify for Medicare benefits.
At the retirement interview at McDonnell Douglas, the Patelskis were told that “he would be covered until he died, and that I would be covered for the rest of my life or until I remarried,” Bonnie Patelski said in an interview after the hearing.
Joining the Patelskis at the witness table was Ted Abrahams, 71, former director of flight and laboratory testing at McDonnell Douglas’ plant in Long Beach.
The company’s decision to cancel the benefits “is a disaster for retirees,” Abrahams said in an interview. “I am in relatively good health and I am eligible for Medicare, but my wife is 15 years younger,” said Abrahams, a resident of Fountain Valley.
Metzenbaum suggested that firms canceling retiree benefits might be barred from future government contracts.
McDonnell Douglas is now holding discussions with the government and will reduce the prices on some contracts to return money that covered the cost of future retiree health benefits, according to corporate spokeswoman Anderson.
