How Coal Bankruptcies Are Changing The Health Insurance Conversation

Oct 28, 2019

Darlene Rea worked in Blackjewel's warehouse before the company filed for bankruptcy on July 1. I spoke with her earlier this summer when she was struggling to find a job. Months later, she still never found one.

"Putting in app after application after application and hearing nothing and getting denied," Rea said.

Then suddenly, unemployment got even harder: Blackjewel canceled her health insurance. She was left with no job and no way to get her insurance back.

"You just hope that [if] something serious goes on, you don't have to go see a doctor or go to the emergency room or... that you stay healthy. And that's what I did for four months," Rea said.

Luckily, she's back to work now. She got her old job back after Eagle Specialty Materials, LLC reopened the Eagle Butte and Belle Ayr mines. But without that, she said there were no alternatives- no affordable ones anyway- to get back health insurance.

"No, there was nothing else,Rea said.

Including Rea, about half of Blackjewel's laid off workers were still without a new job when health insurance was axed. For many, there were few places to turn.

The Blackjewel situation is hardly the first-time energy workers have lost health insurance from a bankruptcy. Earlier this year, retired miners lost it from the Westmoreland bankruptcy. According to one expert, benefits are often one of the first things to go in a filing.

With six coal companies operating in Wyoming filing for reorganization in only four years, the state legislature decided to form a committee to discuss solutions to reoccurring bankruptcy issues. Laramie Senator and committee member Chris Rothfuss agreed that benefits and health care are important issues to discuss.

"These are individuals that through no fault of their own, are now left in a circumstance where they don't have income. They can't afford health care," he said.

The solution for Rothfuss is obvious: Medicaid expansion. He's sponsored four bills to expand Medicaid since 2014. Normally Medicaid is a joint federal-state program that provides health insurance for low-income families with children, the elderly and the disabled. Expansion would add a new category: adults considered very low-income who don't have children.

report last year estimated the expansion would provide health care access to about 27,000 more Wyomingites, including many who would have no other options. Rothfuss said that could include recently out-of-work coal employees like Rea.

"If we're taking seriously the struggles that we'll see in the future both with coal mine shutdowns, as well as power plant shutdowns in other communities around the state then we have to seriously discuss Medicaid expansion or some other alternative," he said.

An infographic put together in April of this year.
Credit healthinsurance.org

Wyoming's Joint Revenue Committee will soon discussMedicaid expansion bill in its November meeting. Wyoming remains one of only thirteen states not to have expanded the program. Rothfuss hopes the recent spate of bankruptcies will change some legislators' minds who represent coal country.

"[Those legislators are] now in districts that are the most vulnerable, and with constituents that are most needful of those health care benefits."

For now, minds have not changed. Gillette Senator Jeff Wasserburger said Medicaid expansion would be impossible in a budget session that requires two thirds vote for introduction. Afton Senator Dan Dockstader said he's not sure how expansion would help anyone right now.

Gillette Representative Scott Clem called the move premature and questioned whether able-bodied people should be getting Medicaid anyway.

There's even some disagreement over whether expansion would work to address displaced energy workers. Wyoming's Department of Health said it depends, but it would likely help displaced workers. The state Department of Insurance's Denise Burke has another idea.

"I think it's unlikely that most of the people who worked for... Black Jewel would have qualified for Medicaid, whether it was expanded or not," she said.

Meanwhile, the Select Coal Bankruptcy Committee is looking at other solutions to the health insurance question. Representative Clem said one idea seems to be getting traction.

"One of the things that we had talked about is requiring bonding for companies… particularly to bond for something like health insurance," he said.

The concept is for companies to set aside money to ensure workers are protected in the case of bankruptcy.

Denise Burke said bonding is not a bad idea if done correctly. But no matter the mechanism they choose, she said it's urgent to provide help quickly.

"The number one reason that families declare bankruptcy is because of a health crisis. So, going without health insurance is incredibly frightening," she said.

The 2018 projected Medicaid Expansion enrollment.
Credit Cooper McKim

For now, Burke said the Affordable Care Act marketplace is a possibility for some, especially with subsidies for low-income people. But right now, there's only one participating company given the low population in the state. Burke also encourages people to set up a Health Savings Account to ensure they have a safety net.

Burke said this is a tough issue to solve because the cost of health care is increasing rapidly, making insurance more and more expensive. With that in mind, she said it's good to hear that the legislature is taking another look at how to make it more manageable for the average person who can't afford to pay for a medical procedure out-of-pocket.

"I think the legislature is realizing that, and the nature of health coverage has changed. And so, I think, that's why they are looking at options like the bonding or looking at perhaps changing some things in the bankruptcy," Burke said.

Former Blackjewel employees are back to work after Eagle Specialty Materials restarted operations though many are still looking for a long-term solution. So, for now, they have health insurance again. Gillette Representative Eric Barlow said he expects bonding for health insurance to come up at the upcoming legislative session.

Have a question about this story? Contact the reporter, Cooper McKim, at cmckim5@uwyo.edu.