Footing the Healthcare Bill
The federal government created The Black Lung Disability Trust Fund to ensure the coal industry, rather than taxpayers, covered the costs associated with providing black lung benefits.
The Fund is financed primarily by an excise tax on coal that is mined and sold in the U.S.
Due to closures in mining operations, roughly 75 percent of black lung disability and medical payments are paid out of the Fund instead of from mine operators.
As of 2019, miners who are completely disabled by black lung received approximately $670 per month in support, plus payment of medical costs associated with the disease. Dependents and survivors are also eligible for benefits.
More Funding Needed
Over the years, as claims have increased, the Fund has not raised enough revenue to keep pace with these obligations. When the Fund has insufficient resources to fully cover approved claims, the federal government typically steps in to either increase the excise tax on coal, forgive or refinance trust fund debt, or modify black lung benefits eligibility.
In 2018, Congress failed to act fast enough and the tax rate supporting the Fund reverted back to 1978 figures—a 55% reduction. In December of 2019, Congress passed, and President Trump signed into law, an end-of-year spending package that included a one-year extension of the 2018 tax rates. These rates expired on December 31, 2020.
Just Transition Fund’s Take
The Black Lung Disability Trust Fund is a critical resource for impacted workers and their families that protects an already stretched local tax base from incurring the brunt of these medical costs. However, the drop in funding, combined with the decreasing percentage of claim payments from mine operators and an increase in the rate of extreme black lung cases over recent years, is putting financial strain on the Fund, which is currently $5 billion in debt. That deficit is expected to grow to $15.4 billion by 2050. The Black Lung Benefits Disability Trust Fund Solvency Act of 2019 proposed to address the Trust Fund’s solvency issues by extending the higher excise tax rate through 2029, but Congress failed to act on the measure before the session closed. To make this funding more stable, a long-term federal funding commitment is critical.