When Pabst Brewing Company closed its Milwaukee plant, it also ended its union contract which guaranteed retiree medical coverage. Pabst's action left its former workers with the dilemma of paying high prices for medical insurance or receiving none at all, reports CBS News Correspondent Ray Brady.
Many of the company's former workers were left uncovered at the dangerous age of 55-64: too young for medicare, too old for affordable heath insurance.
After decades of work, the company's workers and retirees were faced with a stark choice: either cover their medical costs by going back to work or, if they are too sick, go on welfare.
After 31 years of working at Pabst's, Cheryl and Stanley Madden were faced with few choices in order to receive medical insurance. The couple is now bankrupt and trying to afford payments for Stanley's kidney treatments.
"In about two years I've been retired, it's cost me about $15,000 just for the premiums," says Stanley Madden.
The state is helping the Maddans with their high-priced bills and that's part of a trend even Pabst CEO Bill Bitting sees for the future. He makes no apologies for the related consequences of Pabst's action in ending its union contract.
This problem is not unique to Pabst says health insurance advisor Bob Braddick. He's found companies offering medical insurance to retirees dropped from forty percent to thirty percent in just five years.
"There are finite dollars in the budget. The question is where the money goes," he says. "Retiree medical care is not just a given anymore...it's something everyone has to think about."
If a company's money goes to medical insurance for retirees 65 and over, the cost for the company and retiree is just $2,092. But, for those under 65, without medicare, the total goes up to almost $5,000.
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CBSNews.com staff CBSNews.com staff