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When an auto accident forced Stephen Skvara to retire from LTV Steel, the electrical repairman did not anticipate financial hardship. After all, he had 34 years of service at the Indiana Harbor Works in East Chicago.

Then two blows came.

His retirement payments were cut by one-third, to $12,000 annually, when bankrupt LTV shifted its obligations to the federal Pension Benefit Guaranty Corp.

Next, the employer-paid insurance that covered most of the medical costs for himself and his wife, substitute teacher Sandra Skvara, was cancelled. At 58, Mrs. Skvara is too young for Medicare coverage and goes without insurance because the payments are too high for both of them.

“We had the Cadillac insurance before. Now, I‘m driving a Chevy and the wife doesn‘t even have a Chevy,” Skvara said. “We keep sweating it out, hoping that nothing happens. That weighs constantly on my mind.”

Skvara’s situation is far too familiar to 200,000 retirees and spouses of  retired steelworkers whose benefits were washed away in the bankruptcies of LTV and its former rival, Bethlehem Steel.

The extent of the disruptions has been detailed in a new study produced by the California- based Kaiser Family Foundation in cooperation with the United Steelworkers union.

“We consider the Kaiser study as groundbreaking and required reading by our government policy makers,” said USW President Leo W. Gerard. “I can’t think of anything that weighed more on my mind during the past steel crisis than when our 200,000 retired steelworkers and surviving spouses lost their health care benefits following the liquidation of LTV and Bethlehem Steel. Our government can do better for our retirees and this study demonstrates the need.”

Nearly three quarters of the 2,691 retirees who responded to a Kaiser survey eventually obtained replacement coverage or a supplement to their Medicare coverage, although many reported that the loss of benefits caused significant disruption to their retirement plans.

“Even though over time a lot of them found coverage, they had some hardships throughout,” said Isadora Gil, a Kaiser researcher. “They had problems with access to care, and quite a few had to cash in savings.”

Returned to work

Among retirees under age 65 almost half reported that they or a spouse returned to work or delayed retirement as a result of the loss of their steelworker retiree health benefits.

About one in four reported that they cashed in “a lot” of their savings or assets so they could pay for the cost of replacement health care coverage or premiums.

Those that were uninsured at the time the survey was conducted were twice as likely to report that they or their spouse went without or postponed needed medical care from a doctor due to cost.

Nearly a third (29 percent) of the pre-65 respondents said they postponed or went without recommended hospital care while 49 percent reported postponing or going without care from a physician.

Medicare provided primary coverage for retirees and spouses ages 65 and over. About three in four (74 percent) were covered by a Medicare HMO or obtained supplemental coverage.

Medication skipped

Half of all Medicare-eligible respondents without supplemental coverage reported that they “often” or “sometimes” did not take medication as prescribed due to cost, compared to 29 percent of those with supplemental coverage.

The USW helped Kaiser identify the affected retirees and surviving spouses. The survey sample included both early retirees aged 64 and younger in Pennsylvania, Indiana, Ohio and Maryland and Medicare-age retirees in Indiana and Ohio.

Kaiser also looked at the impact of the Health Care Tax Credit, a federal program enacted in late 2002 to help workers and retirees in industries displaced by international competition.

The tax credit pays up to 65 percent of the premium for health insurance for qualified health plans for certain people ages 55 to 64. A qualified plan must meet criteria established by the government.

Tax credit some help

The tax credit program was in place when about 95,000 Bethlehem retirees and dependents lost benefits in 2003, but it was not immediately available to LTV retirees.

As a result, an estimated 34 percent of Bethlehem retirees took advantage of the tax credit program, while only 13 percent of LTV retirees did so.

“It clearly demonstrates that if there were really good government programs, people would move to those programs because that’s the best place for them to get their health care,’’ said Bill Klinefelter, USW legislative director.

Since completion of the survey, which was conducted in 2004, retirees have received some further assistance to help with health care costs thanks to efforts by the USW.

International Steel Group (ISG), the company that bought the assets of LTV in 2002 and those of Bethlehem Steel in 2003, worked with the USW to establish a benefit trust fund called the ISG Voluntary Employees’ Benefit Association, or VEBA.

VEBA offers prescription help

By March 2005, the VEBA had sufficient funds to begin offering a prescription drug program to both Medicare-eligible and non-Medicare retirees and dependents who lost coverage through the bankruptcies. Medicare beneficiaries now have the option to receive prescription drug benefits from the VEBA plan or a Medicare Part D drug plan, but not both. Approximately 75,000 individuals were eligible as of early 2006.