| We've written before on individual medical mandates, which would require individuals to buy health insurance under many of the proposed health care plans being considered by Congress. A related issue questions what obligations corporations do/would/should have relative to providing insurance for their employees. On the one hand, some people believe that corporations should get out of insurance altogether, aka the Public Option. Others want to see employers keep the current system expanded so that employers must either offer insurance or pay a fine for not doing so. Say hello to Wal-Mart, game-changer. After years of strenuous opposition, Wal-Mart, the nation's largest private employer, announced yesterday that it supports a controversial proposal requiring businesses to contribute to the cost of employee health insurance.
Wal-Mart employs between 1.4 and 1.8 million people, depending on whose numbers you believe, and is the world's largest private employer. They're also generally a Republican company, in terms of the money donated to causes, candidates, and the party itself. (Don't get me started on Blanche Lincoln.) So this is a little out of character. Kinda sorta. You can read the actual letter they sent to President Obama here. It says, in part: We are for shared responsibility. Not every business can make the same contribution, but everyone must make some contribution. We are for an employer mandate which is fair and broad in its coverage, but any alternative to an employer mandate should not create barriers to hiring entry level employees. We look forward to working with the Administration and Congress to develop a requirement that is both sensible and equitable.
Believe it or not, that paragraph is their get-out-of-jail free card. What they are saying between the lines is that someone has to recognize that it could cost Wal-Mart, or any employer, almost as much in health care premiums than they would spend in salary, and therefore, insurance premium pricing needs to come down, or the fines need to be minimized. Here's my math: Current national minimum wage is $6.55. (Yes, I know it goes up later this month, but the premium numbers are from last year). Minimum number of hours to be considered "full-time" and thus eligible for benefits: 37.5 $6.55 x 37.5 x 52 = $12,772. Median family health insurance premium, 2008, $12,680.
While a place like Wal-Mart can get an economy of scale reduction in annual costs, small businesses cannot. The cost per year for their employees can be double the median. Certainly, the cost of health care is shared between most employers that provide it and their employees. Can a minimum wage worker stand to spend a quarter or a third of his/her gross salary on health insurance? Not so much. Further, Wal-Mart also supports the trigger option, which is pretty much a disaster. So, while the MSM is telling you today what a great corporate citizen Wal-mart is, remember that they know they are going to have to pay something, and they want a seat at the table to find a way to minimize the cost to them. It's hard to overstate how important being part of the process is. For example, the AMA refused to take part in the Medicare/Medicaid negotiations, and it didn't work out so well for the doctors. By "being there" Wal-Mart has well positioned itself for the coming negotiations, and can now put them out as a benevolent dictator employee-oriented company when it wants to lobby full throttle against EFCA. |
