W.R. Grace & Co. said this week it will keep operating its medical program for asbestos victims in Libby even though the company has proposed a $2.9 billion bankruptcy settlement with all claimants.

Grace Vice President William Corcoran said there has been confusion about the medical program as it relates to the bankruptcy.

"We have made it clear for many years that we intend to sustain the health-care program when we emerge from Chapter 11, just as we did when we went into bankruptcy," Corcoran said in a press release.

Grace's medical program has been in effect since 2000 in Libby, with more than $14 million spent on health care for people with asbestos disease linked to exposure from Grace's defunct vermiculite mine at Libby.

Corcoran added that Grace will give its annual contribution of $250,000 to St. John's Lutheran Hospital in Libby. The company has given the hospital more than $2 million since 2000 to keep pace with care for asbestos patients.

Grace's medical program is still wrought with problems, said LeRoy Thom of Libby, vice president of the Center for Asbestos Related Diseases board of directors and president of the Libby Asbestos Medical Plan.

"They can have the best plan on paper, but if they don't follow through it's not worth the paper it's written on," Thom said.

Patients are continuously denied services such as supplemental oxygen to help them breathe, he said.

More than two years ago, the 800 Libby residents enrolled in Grace's medical plan were put on notice that benefits would be scaled back, including a reduction in the number of chest X-rays covered to one per year.

"If the Grace medical plan followed the same criteria as other plans, they'd be held to a standard," Thom said. "We've asked for that. We've asked to let an insurance review board look at the claims."

Grace has balked at any intervention, he added, saying the company indicated it could opt to scrap the plan if it's scrutinized.

Libby has gotten some money for asbestos health care from other sources, but it's not nearly enough to sustain ongoing care for asbestos victims, Thom said.

He and other advocates in Libby put together a coalition that developed a plan for a medical trust fund for future care and conducted several telephone conference calls with Grace officials, to no avail.

"Ultimately we got a letter saying they appreciated our work, but they felt because of the bankruptcy they'd be unable to fund a trust," Thom said. "So here we sit still out there, battling for everything we get."

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at [email protected]