The coal miners dilemma

The coal miner dilemma

COAL MINER'S HEALTH CARE: more waste and more socialize the costs.

Like most Americans I did not realize I was subsidizing health care for coal miners – not commercial fishermen (the most dangerous occupation), not farmers and not most other occupations. “ It is the only time that Congress had intervened to provide retiree health benefits that had been promised by a private party. Congress intervened again in 2006 after a series of bankruptcies in the coal industry”.  The Atlantic.

This all came out as part of the negotiations to extend the US Budget. It turns out we have been have been paying quite a bit to provide health care to 22,000 miners no longer covered by their bankrupt companies. According to Fox News  we paid nearly a billion dollars to the United Mine Workers (UMW) between 2011 and 2015 for health care. The estimated cost to continue under a bill in congress is 2.2 billion for the next 10 years.

If you Google coal miner’s health care you can find a lot more background part of which is an “obligation” of the government to take care of miners dating back to 1946.

People of good will can argue about moral obligations on one side and budget responsibility on the other side or even the fairness of favoring one occupation over others but there are three other aspects that are troublesome.

That same Fox News report is mostly about an audit of the agency that makes the payments to the miners. The payments are made directly to the UMW with almost no oversight from the agency. The union makes the decisions about who gets the money, doesn’t seem to follow standard insurance procedures and appears to charge 48% overhead. So we have a program that may have merits but is grossly inefficient.

Besides the 1946 “obligation” to support coal miners, why are we involved so directly in their health care? As members of a powerful union and with help from the government back in 1946, miners bargained for good, employer-provided health care. But as coal profits have fallen due to competition from natural gas, several big mining corporations have gone bankrupt. It’s doubtful the owners suffered much as they likely socked away their profits in good investments (not coal). But of course they were excused from any serious obligation to fund health care for out of work miners. So here we are again – privatize the profits and socialize the costs.

Is coal really worth the cost?

And finally, miner’s pensions are also at risk.  A bill in congress proposes to use the Abandoned Mine Reclamation Land fund to shore up pensions. As you might expect the fund was meant primarily to fix the environmental damage left by abandoned coal mining operations. It's easy to argue that helping people is more important than restoring mining sites. But why are miners getting a special social safety net? There are a host of safety net programs already in place for workers in every other occupation who lose their jobs and whose pensions are threatened.

Is the cost of coal really worth it?