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Archive for Monday, June 13, 2005

Shifting the health-care burden

June 13, 2005

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— I've stayed out of the Wal-Mart wars. Didn't say a word when the discounter was caught using illegal immigrants as janitors in its sprawling superstores. Never spoke out about allegations that it forced employees to work off the clock, or shorted them on overtime, or locked them into stores overnight. I didn't even peep when Wal-Mart broke child labor laws so flagrantly that the Bush administration Labor Department, not known for its zeal, fined the company.

My blinders were ripped off when I happened upon a story developing in Minnesota, where state lawmakers, like officials everywhere, are wrestling with the twin crises of growing numbers of uninsured people and budget woes in state-run health insurance programs. In Minnesota, as in about two dozen states, lawmakers are trying to find out just who among the working poor are turning to Medicaid and other state health programs for insurance. Are they self-employed? Former welfare recipients? Workers in small businesses that can't shoulder the insurance burden?

Wal-Mart, it turns out, doesn't want the people's representatives to find out what the people are paying for.

It lobbies actively in Minnesota and elsewhere against proposals that would require the reporting of employment information on state health insurance recipients, already in some state files. "We have no way of knowing the methodology they use for gathering the information," says Nate Hurst, a Wal-Mart corporate spokesman. And besides, Hurst says, "it does not take one single person off the uninsured list."

But is that list of great concern to Wal-Mart? Or are the troublesome lists really those from states that already have gone public with names of employers who have large numbers of workers getting taxpayer-funded health insurance?

In many states where the information has come into public view, Wal-Mart routinely tops the list, or it comes close.

The pattern is the same in red states and blue. In a 2002 Georgia survey, Wal-Mart employees had 10,261 kids enrolled in the state's PeachCare for Kids program - about 6 percent of all kids enrolled in the insurance plan had a parent working for Wal-Mart. In Tennessee, Wal-Mart ranked first with 9,617 employees using TennCare - that's nearly a quarter of the company's work force in the state. In Connecticut, Wal-Mart also finished first. Officials there also found that 70 percent of Wal-Mart employees who participate in its state health-insurance programs worked more than 30 hours per week.

The story is similar from Massachusetts to California, from deep in Texas to way up in Washington.

The company says it's logical that it would appear so frequently at the head of this dubious class since it is the nation's largest employer. Others say something more is at work: Massachusetts officials found that Wal-Mart subsidizes its employee insurance premiums at a much lower rate than comparable employers such as K-Mart and Target. A separate 2003 case study by Harvard Business School showed that Wal-Mart's spending on health benefits for its employees was $3,500 per worker, compared with $4,800 in the wholesale and retail industries, and $5,600 for U.S. employers generally.

So here's how it works: Wal-Mart offers insurance, but aggressively shifts the cost onto its employees. The low-wage workers then pass up the unaffordable coverage and turn to the states. If this isn't exactly company policy, it is at least company philosophy. CEO Lee Scott, at the company's recent "summit" for the media, even described it. He said some state health programs are "so lucrative that, in fact, it's hard to be competitive with them and certainly extraordinarily expensive to be competitive with them."

Since when did safety net programs funded by taxpayers become another consumer product? Who decided that this choice has no more significance than deciding between shopping at Wal-Mart or Costco?

To hear Scott and other company spokesmen tell it, the company's workers are free to choose Wal-Mart coverage and just as free to "choose" Medicaid, if that's what suits them. Of course if they "choose" Medicaid, their coverage is financed not only by Wal-Mart but by all other businesses that pay state taxes. And by workers - waitresses and janitors and clerks and cab drivers - who pay taxes but may have no insurance of their own.

For all its groundbreaking efficiencies, Wal-Mart is a leader in a most unseemly inefficiency: A massive shift of health care expenditures from business to taxpayers. Surely a company that's figured out how to do just about everything better than its competitors could find a way to fix this, too.

Marie Cocco is a columnist for Washington Post Writers Group.

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