Wal-Mart Stores Increase Medicaid Expenditures, Study Finds
Wal-Mart increases Medicaid expenditures by an average of $898 per employee, according to a study presented on Friday at a conference held by the company to examine the impact of Wal-Mart on the U.S. economy, the New York Times reports (Greenhouse, New York Times, 11/5). Wal-Mart held the conference, "An In-Depth Look at Wal-Mart and Society," to address criticism of wages, health benefits and workplace policies and "examine its effect on jobs, inflation and income growth," Bloomberg reports (Bloomberg, 11/4).
Wal-Mart commissioned the independent economic research company Global Insight to manage the conference, conduct a study and solicit research (Joyce, Washington Post, 11/5). In total, nine studies were presented at the conference (Grant, USA Today, 11/7).
For the Medicaid study, economist Michael Hicks, a professor at the Air Force Institute of Technology, examined the impact of Wal-Mart on government aid programs. According to the study, Medicaid expenditures increase by 1.5% for every 1% that the market share of Wal-Mart increases in a state.
The study also found government aid to families decreases by 3.3% for every 1% that the market share of Wal-Mart increases in a state (Bloomberg, 11/4). Wal-Mart does not increase expenditures for welfare or food stamps, the study found (New York Times, 11/5).
The Medicaid study is available online. Note: You must have Adobe Acrobat Reader to view the study.
The other studies presented at the conference also are available online.
In related news, Roll Call on Monday examined how an internal memo that recommended Wal-Mart hire more part-time employees and discourage unhealthy job applicants to help reduce health care costs "has given a jolt to anti-Wal-Mart activists' Capitol Hill agenda and forced Wal-Mart to do damage control in Washington, D.C., and around the country."
Chris Kofinis, communications director for Wake Up Wal-Mart, said, "In an ironic way, Wal-Mart has given strength to the importance of this movement. A growing number of American people realize that this needs to be looked at from a political and legislative standpoint." Kofinis said that the memo "raises serious issues" related to the Americans With Disabilities Act.
However, Susan Chambers -- Wal-Mart executive vice president of benefits and author of the memo -- said, "Nothing could be further from the truth," adding, "We are the single largest employer of people with disabilities" (Ackley, Roll Call, 11/7).
In addition, newspapers recently published two editorials and two opinion pieces on issues related to health benefits for Wal-Mart employees, such as the memo and plans to offer workers a new lower-cost health plan called Value Plan. Summaries appear below.
Los Angeles Times: The memo "provides ample ammunition" to critics of Wal-Mart, but "it also speaks well of the company," a Times editorial states. Although the memo "is as much about spin as it is about substance," the document "makes some innovative suggestions," such as in-store health clinics and employee discounts on healthy foods, according to the editorial (Los Angeles Times, 11/5).
- Michael Critelli, Miami Herald: The memo "exposes a reality that we are aware of but rarely see so blatantly exposed: the crisis of major employers staggering under the weight of skyrocketing health care costs," Critelli, chair and CEO of Pitney Bowes, writes in a Herald opinion piece. "Prevention strategies" to reduce health care costs for companies can produce "dramatic" results, he writes. Critelli concludes that "prevention strategies clearly can generate the best long-term results by improving the health of workers and reducing health risks" (Critelli, Miami Herald, 11/6).
USA Today: Value Plan "is a worthy experiment that could be attractive to other companies struggling to expand coverage but control health expenses," a USA Today editorial states. Although Wal-Mart could "do more," a "bare-bones policy" such as Value Plan is "better than nothing," the editorial concludes (USA Today, 11/7).
- Paul Blank, USA Today: Value Plan is "unlikely to insure one additional worker" because the plan has "extremely high deductibles and strict eligibility requirements," Blank, campaign director at Wake Up Wal-Mart, writes in an opinion piece. He concludes, "Americans will see Wal-Mart's announcement for what it is -- a company desperate to hide its growing moral bankruptcy" (Blank, USA Today, 11/7).