New York Times Examines Debate Over Wal-Mart Health Coverage Policies
The New York Times on Monday examined the growing pressure on Wal-Mart to solve "what critics see as its miserly approach to employee health care," which some say forces many employees to rely on public health insurance programs or charity care. According to the Times, full-time employees at Wal-Mart have salaries of about $1,200 per month, or $8 per hour.
Wal-Mart-sponsored health plans have monthly premiums for family coverage ranging as high as $264 and out-of-pocket expenses as high as $13,000 in some cases, and such costs make health coverage unaffordable for many employees, the Times reports. The company requires employees to cover 33% of the cost of benefits, and it plans to reduce that contribution to 30%. Under company rules, full-time employees must wait six months before they are eligible for health coverage, and part-time workers must wait at least two years. Because of high turnover at the company, some employees do not work long enough to become eligible for coverage, according to the Times.
Some employees say Wal-Mart encourages employees to turn to public health insurance programs, the Times reports. A survey by Georgia officials found that more than 10,000 children of Wal-Mart employees were enrolled in the state's SCHIP program at a cost of nearly $10 million annually. Similarly, a North Carolina hospital found that 31% of 1,900 patients who said they were Wal-Mart employees were enrolled in Medicaid, and an additional 16% were uninsured.
Such claims have prompted officials in some states to call on Wal-Mart to "share more of the financial burden of its workers' health care costs," the Times reports. California last year passed a law (SB 2) that will require most employers to provide health coverage to employees or pay into a state insurance pool that would do so. Backers of the law say Wal-Mart employees cost California health insurance programs some $32 million annually. Washington state Insurance Commissioner Mike Kreidler (D) is pushing for a similar state law.
According to the Times, Wal-Mart "vigorously defends its health care policies, saying it offers affordable coverage for all employees." The company says that its employees are mostly insured, citing internal surveys showing that 90% of workers have health coverage, often through Medicare or family members' policies. Wal-Mart officials says the company spent about $1.3 billion of its $256 billion in revenue last year to provide health coverage to about 537,000 people, or 45% of its total work force. In addition, officials say that 23% of its employees are ineligible for coverage, and it covers 58% of those who are eligible.
According to the Times, Wal-Mart competitor Costco Wholesale, provides health insurance to 96% of eligible employees. In recent weeks, Wal-Mart has "gone on its own offensive" against critics of its health care insurance policies, the Times reports. The company has been running a television ad nationally that features a Wal-Mart worker praising the company's health care coverage for saving the life of his son, who had a life-threatening liver disease.
In addition, last week the company said it would spend about $500,000 on the campaign to defeat SB 2. A measure (Proposition 72) on the Nov. 2 California ballot asks voters to decide whether to uphold or repeal the law. "We are doing everything we can to take care of our associates and not shift costs," Susan Chambers, executive vice president at Wal-Mart, said. She added that the larger issue is whether companies should be forced to absorb the rising cost of health care, adding that any discussion of solutions should be "part of a national debate" (Abelson, New York Times, 11/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.