Why Wal-Mart Backs Mandatory Health Coverage

Wal-Mart's endorsement of a requirement that employers offer workers health insurance is a reminder that while most employers may resist such a law, those employers who pay most workers already offer insurance and can thus painlessly support the principle.

About half of America's workers are employed by a firm with more than 500 workers - the percentage rises over time - and nearly every one of them is offered an opportunity to buy insurance. Only about six percent of them are uninsured. As firm size shrinks, the insured population grows, reaching 30 percent among those who have fewer than nine colleagues at work.

The big employers comprise less than one percent of all employers, but have ample political clout. They find an increasing number of reasons to find mandatory coverage attractive and the upcoming debate may further fray their already deteriorating relationship with the Republican Party.

Here's why:

1. It creates a more level playing field, imposing costs on their competitors who aren't now offering health insurance. That's why American Airlines took a similar stance more than a decade ago.

2. It lowers their costs. Insofar as the uninsured run up costs for care that are then shared by the insured population, any move toward universal insurance provides relief for those now providing coverage.

3. It solves a problem they have little confidence they can solve and decreasing enthusiasm. In an era where businesses are concentrating on what they do best and outsourcing ancillary tasks, fretting over keeping health insurance costs down is a distraction they have decreasing patience for. Business groups that once thought they could fix the system have decided the problem is simply bigger than they are.

4. It buys them a seat at the table. There are many ways to design a health reform program. Chances of influencing a design they'll ultimately be comfortable with are better if they are helping construct the new system rather than opposing it.

For reasons both practical and political, small business owners continue to be wary of such a mandate. At best, it will exclude them while making it more difficult to recruit workers who'll increasingly expect health insurance as part of an employment package. At worst, it will impose complex and costly new responsibilities.

While both parties continue to genuflect toward small business as a sparkplug of the American economy, this issue indicates a growing split within the employer community between the bigs, who are comfortable dealing with other big institutions and complying with a growing rule book, and small firms who are struggling.

If the health debate concludes with the American people seeing Wal-Mart -- which offers convenient in-store clinics, discount prescriptions and health coverage for its employees while championing such protection for all -- as the good guy and their neighborhood store that offers less selection and higher prices along with service from an uninsured workforce as simply old-fashioned and out-of-step, that could have a big impact on our politics in the years ahead.

Comments

[twosexy4mycat]

WALMART IS greedy greedy greedy boycott them

[StPeteDave]

Walmart wants a clinic in every store.

[confidance government]

They did this to kill their competition; they supported raising minimum wage when they were already paying 30% higher than average, this is the same sort of tactic. Their idea is to impose via regulation higher labor expenses on smaller competitors that will not be able to compete.

Classic example of industry calling for regulation for less than altruistic motivations.

[Jim Jaffe - Huffpost Blogger]

may be so, but is this good or bad news. if workers at the bottom got a raise because of Walmart's effort to raise the minimum wage, albeit below the level they were already paying, is that a positive or negative thing?

[DesertDogAlpha]

To answer that question we need to know: will there be more or fewer jobs? With the many articles about displaced auto workers and what they are able to make in their new careers, we now know what the market clearing price for such "skilled labor" (to use a UAW phrase) is - and it's low.

How does 15 percent unemployment sound - with the employment option being a job at $14/hour?

[DesertDogAlpha]

This should give Wal-Mart and other corporate big box retailers a big competitive advantage over locally-owned mom and pop retailers, who will also be required to provide employer health care coverage.

Shut down Main Street and head to the big box on the outskirts of town!

[Dystopic]

walmart's huge buying power already is a huge competitive advabtage ...

companies under 25 employees are exempt

[grazzt]

How is mandating employers to "offer" health and different than mandating the government "offer" insurance. Either way, the consumer doesn't have a direct choice in the coverage offered. So if Walmart is going to offer a salary of $20k + $5k insurance benefit, how is that better than a small company offeringa salary of $25k and no health insurance? Where as it is much easier for any employer to control and manage their salary costs than to try and budget how much their health insurance contribution will change from year to year. There needs to be an affordable plan available for individuals so they have the option of working where they feel they make the most impact, not having to try and get a job at a large corporation so they can have the health insurance needs met. Without a government plan, insurance industries will continue to raise premiums and deductables while continuing to cover fewer procedures. Also, how does mandating employers provide health insurance make us any more competitve in a world market? I thought the excuse was always our health insurance costs pushed onto employers is what makes it too expensive for individual corporations to compete.

[Jim Jaffe - Huffpost Blogger]

well, it would put health insurance on the same level as medicare, social security, worker's comp and unemployment in that workers and employers don't have the option of excluding these benefits to maximize wages. personally, I'd argue that at least as strong a case can be made for mandatory health insurance as for mandatory payments into medicare, which may not provide them with any benefits if they die prematurely.

[LeftRight]

First, Walmart does NOT offer insurance to their employees! They offer it to FULL TIME employees, and then hire most people to work no more than 30 hours, thus not qualifying them for health insurance, or a multitude of other benefits.

Second, if Walmart is supporting this, then there's something SERIOUSLY wrong with it!

[Chaimirija]

That is what I thought, as there was an article in a local paper a few years ago that pointed out many of their employees were on Badgercare (WI Medicaid)...how sweet for them I thought...they get to pay low wages and the State picks up the tab for their employees' health insurance

[dynwitch]

I have a different theory: Betcha Wal-Mart supports mandatory coverage so they can start their own insurance company and then require their employees to buy insurance from them.

[berryessence]

BINGO! And by Wal-Mart being the largest employer in the US. They will be able to save alot of money!

[tsunamiano]

That is why everyone should have the option of choosing a government health plan, even if employers are required to offer coverage. We should have a choice.

My brother works at Wal Mart and they are constantly firing employees who have been there the longest and have the most benefits. They have repeatedly made it difficult for him to re-apply for his annual health care coverage and do not haire full time workers any more to prevent the need to offer health care coverage.

Another issue-while Wal Mart does not offer compensation for sick days (no surprise there) an employee who is sick and has a doctors excuse exempting them from coming to work, will still be penalized for missing work as if they just did not show up. If they miss 2 or more days because they have the flu, they can be terminated no matter how long they have worked there.

This company should not be allowed anywhere near the table of health care decision making!