Archive for Wednesday, January 25, 2006

Wal-Mart health care bill garners little support

January 25, 2006


A Kansas legislator on Tuesday accused Wal-Mart Stores Inc. of dumping its workers' health care costs on the state.

"I don't think it's fair that some of our large employers offer decent health insurance to their employees and some don't - and the ones that don't end up on the state program," said state Rep. Geraldine Flaharty, D-Wichita.

"It's unfair to the other businesses," she said, "and it's unfair to the taxpayers."

Flaharty has introduced a bill - House Bill 2579 - aimed at making Wal-Mart spend more on its employees' health insurance.

The bill is similar to one adopted in Maryland earlier this month when the state's Democrat-led Legislature reversed Gov. Robert Ehrlich's veto.

The bill requires companies with more than 10,000 employees to spend at least 8 percent of their payroll on employee health benefits.

If they don't, they would have to pay the state's Department of Labor an amount equal to the difference between their health insurance costs and the 8 percent figure.

In Maryland, more than one-fourth of the children of Wal-Mart employees are insured through the state-run program for low-income families.

A precise number for Kansas was not available Tuesday, but Robert Day, director of the Division of Health Policy and Finance, said Wal-Mart employees have the most children enrolled in the state's HealthWave program.

"They're three-fold more than the second largest employer group, which is McDonald's," Day said.

Currently, more than 37,000 Kansas children are on HealthWave.

Flaharty's bill may be short-lived. Originally scheduled for a hearing Friday morning before the House Commerce and Labor Committee, the bill was pulled Tuesday by House Speaker Doug Mays, R-Topeka.

'Deep sixed'

It's now before the House Insurance Committee, which is chaired by Rep. Clark Shultz, R-Lindsborg. It's vice chairman is Rep. Eric Carter, R-Overland Park, who recently announced his intent to challenge Kansas Insurance Commissioner Sandy Praeger in this year's GOP primary.

Carter has said Praeger is not friendly enough to business.

"Forget it, it's not going to happen," predicted Rep. Candy Ruff, D-Leavenworth, vice chairwoman of the commerce and labor committee. "Eric Carter's not going to let that play out for all to see and then turn around and run for insurance commissioner."

Repeated attempts to reach Carter, Mays and Shultz for comment Tuesday were unsuccessful.

"I know what's going on," Flaharty said. "I've been deep sixed. It's dead."

The state's largest business lobby, The Kansas Chamber, opposes the bill.

"It's another mandate on business," Jim Gregory, a Chamber spokesman said. "It doesn't fix anything having to do with health care costs and it certainly doesn't contribute to making Kansas a good place for businesses to grow."


Praeger, too, opposes the bill.

"At this time, the commissioner wouldn't be inclined to support such a measure and does have concerns with putting mandates on companies that they can't afford," Praeger's public information officer, Charlene Bailey, wrote in an e-mail to the Journal-World.

Praeger, Bailey said, hopes the recent negative publicity that accompanied the Maryland bill will "encourage" Wal-Mart to "change their policies and provide better coverage in the future."

But Kelly Hobbs, a spokeswoman for Wal-Mart, argued that much of the bad publicity has been undeserved.

"We offer health insurance to all our employees - full-time and part-time - for as little as $11 a month in some areas, $23 a month in others," Hobbs said.

When asked how much employees pay in deductibles, Hobbs replied: "It varies - in our Value Plan, you don't pay anything for your first three visits. But we offer a lot of different plans for our employees."

Union driven?

At least 30 states, including Kansas, are thought to be considering bills similar to the one passed in Maryland.

"The bills we're seeing are the result of a multi-million dollar campaign being run by Washington, D.C., (labor) union leaders who are intent on attacking major employers," Hobbs said.

Flaharty said she introduced her bill at the request of the Sedgwick County Federation of Democratic Women, which does have ties to labor unions in Wichita.

"I've heard from my constituents as well," she said.

Ruff bristled at Hobb's assertion that the legislation is union-driven.

"Maryland stood up to Wal-Mart," she said. "The question now is when do the rest of us stand up to this behemoth?"

Day said he wasn't sure what to make of Flaharty's bill.

"What I find amazing is that we continue to add children to HealthWave at a time when the economy is growing," Day said, a key adviser to Gov. Kathleen Sebelius on health care issues.

"So what does this mean? It means more and more working families can't afford health insurance for their children," he said. "And whether we like it or not, it means Medicaid and HealthWave are becoming health insurance programs for people who are working."


Richard Heckler 12 years, 5 months ago

Wal-Mart is Not a Business,It's an Economic Disease

just_another_bozo_on_this_bus 12 years, 5 months ago

Wal-Mart's "success" is primarily attributible to the exploitation of its workers, and the benefits it provides are much more similar to a feudal lord than anything else, especially in its partnership with the Chinese (and other) government(s) in the use of slave labor.

Skeptic 12 years, 5 months ago

For a company that is treating it's workers so badly, it's amazing how many people work and continue to work at wal-mart.

The vast majority of workers would be costing the state MORE money if they were not working there.

lunacydetector 12 years, 5 months ago

walmart is essentially paying for the gigantic dam on the yangtze river, saving tens of thousands of lives per year.

badger 12 years, 5 months ago

Marion, when a business openly encourages its employees to apply for state aid rather than insurance through work, they're abusing the system.

23 bucks a month may not seem like much, but I notice they're careful not to mention what the insurance costs if you aren't single. I'd imagine it's probably cost-prohibitive to add your family to your insurance. Every place I've ever been where they actually charged single people for insurance (currently, if you're single, a lot of places just cover your medical and dental) has charged 150-200 bucks a month for family coverage. To put it into perspective, if you're making 7 bucks an hour at Wal-Mart, that's 15% of your gross income, and probably closer to 20% of your net. Either way, it leaves you with between 700 and a thousand bucks a month to live on.

They know that they pay wages that won't keep people above the poverty line, so it's cheaper for them to foist their insurance bill off on the state. It's corporate welfare.

Essentially, I'm paying for Wal-Mart to insure its workers. So long as they're a 900-lb gorilla in the employment market, they barely pay subsistence wages and taxpayers foot the bill for people's medical care one way or another. Either we give them Medicaid, or they just go to the emergency room (which can't turn them away) and everyone else pays for it. You can't start turning people away from emergency rooms just because they have no insurance, because that's against federal law (and not a few people died from the practice before it became against federal law).

Just about every state in the nation has made getting all of its citizens (or children at least) insured some sort of goal. Unless we want to foot that massive bill entirely out of individual taxpayers' pockets, the companies who screw people over on insurance need to pay to play, too.

dirkleisure 12 years, 5 months ago

Quote from Marion:

"The entitlement minded ones will do their level best to destroy you while availing themsleves of whatever advantages your business may offer."

Ahem - the only "entitlement minded ones" in this situation are the executives of Wal-Mart, "availing themselves" of government funded health care.

The "advantages" here are being provided TO the business BY the taxpayers. Who is really abusing entitlements?

Your posts are usually better thought out than this one. I'm disappointed.


The Leisure

Richard Heckler 12 years, 5 months ago

Hey Marion,

How much do you suppose that $26,000,000 plus stock options/golden parachute Wal-Mart CEO is stealing from the stockholders?

If Wal-Mart can afford that to one employee it seems like full coverage health insurance would be a piece of cake.

How come you don't believe hard working people deserve good wages and benefits?

Linda Endicott 12 years, 5 months ago

"At this time, the commissioner wouldn't be inclined to support such a measure and does have concerns with putting mandates on companies that they can't afford," Praeger's public information officer, Charlene Bailey, wrote in an e-mail to the Journal-World.

Really? Wal-Mart can't afford health insurance for their employees? They made billions in profits last year, but they can't afford it?

Just makes my money worries seem small in comparison...ha.

Wal-Mart employees aren't even eligible for health care benefits until they've worked there for two years. What are they supposed to do while they wait?

grubesteak 12 years, 5 months ago

I'm not a fan of Wal-Mart. OK, I HATE Wal-Mart. But this bill goes against the free market and common sense.

If Wal-Mart's employees aren't happy with their benefits, then they should push for change within the company, or do something really radical: find a job somewhere else.

That's what I do. That's what happens in the real world. When you're no longer happy with your employer, be it wages, benefits, or other reasons, you're free to go somewhere else.

That's one of the things that makes this country great!

Godot 12 years, 5 months ago

This is so ironic. It was just 30 years ago that Congress had to be persuaded to pass legislation that gave tax breaks to businesses to encourage them to offer health benefits. Very few did back then. And the government certainly did not provide health coverage except for people in the most dire situations. Now, because the government health programs are too easy to qualify for, and so low in cost, some in the government want to force businesses to offer health insurance and even proscribe the amount they must spend on it. Unbelievable.

This is why some of us oldsters keep bringing up the "slippery slope" or "unintended consequences" warnings.

If there weren't any government funded health insurance programs for Walmart employees to take advantage of, then perhaps Walmart would see the valude of providing health benefits.

By the way, what kind of health benefits does Target provide for its part-time employees? Anyone know?

Jamesaust 12 years, 5 months ago

The plan here does not seem particularly well thought-out. Eight percent? Why? Why not 7.75%? Why not 10% Why don't we just vote a minimum income of $100k to all workers so every Kansan will be well-to-do? Do employees of employers with less than 10,000 workers need health coverage less? Aren't these small employers the most common situation for Kansans?

That said, its hardly an anomalie in American business that "success" is the result of shifting private costs onto the public. The Robber Barons of the 19th century would be proud. (Note: to whom do I apply to have the public cover my expenses?) It never ceases to amaze me that people don't think they pay for something just because they don't get an itemized invoice.

It is ironic that both the right and the left seem to agree that the historical (and American-only) oddity of tying employment to health insurance doesn't make a lot of sense, and has some severe drawbacks. Too bad neither side can agree on how to reform that system. The right wants some sort of libertarian, tax free, save and buy health care for the well-off with the poor remaining poor. The left wants some government controlled Hillary-care where private health arrangements are criminalized and everyone gets some form of health care, sooner or later, unless they die waiting.

The real story is that efforts like this are aimed to "'encourage' Wal-Mart (the largest corporation on the planet) to 'change their policies'" NOT by providing better benefits themselves but RATHER to lobby the government to provide healthcare via the taxpayer directly instead of the current system of indirect support. Direct support (yes, socialized medicine) would get Wal-Mart off the hook officially whereas indirect support leaves them liable for this sort of 'publicity' (and leaves Americans with the most expensive health care bills in the world).

badger 12 years, 5 months ago

ottr said:

"Badger said - "Marion, when a business openly encourages its employees to apply for state aid rather than insurance through work, they're abusing the system."

Did you read this? Or do you have some proof? Do you work for Walmart?"

Articles in the Statesman and on CNN in the last few weeks, actually. I imagine it wasn't cheerful enough or anti-liberal enough to make Faux News. The problem wasn't that employees in Austin were being advised of the availability of the programs ("We understand that our insurance options are cost-prohibitive for some; if you're not able to afford coverage through the company, here is information on available state and federal assistance"), but that they were pushing employees to apply for state aid INSTEAD of getting their insurance through Wal-Mart ("Well, we do offer insurance, but we strongly recommend that before you sign up for benefits through the company you apply for state or federal insurance assistance").

I don't mind, exactly, that Wal-Mart opts not to provide good insurance benefits to its employees. They've demonstrated that their workforce is pretty replaceable to them in any case. It's when they got caught in Texas and several other states specifically advising workers to get their insurance on my dime instead of the company's that I start to have problems - and when they go on record after that as insisting they do offer good insurance coverage.

Medicaid for Children is one of the last welfare programs I can completely approve of, because it exists solely for the purpose of getting unisured kids medical coverage. The program is strapped and underfunded, and when a corporate entity prices the coverage they offer (by deciding what percentages of family coverage they'll pay) prohibitively in an effort to make state aid more attractive and improve their bottom line, that not only costs me money, but also means there's less of it for kids, say, whose parents work at small businesses that literally can't afford to offer insurance.

dviper 12 years, 5 months ago


I'm not a Wal-Mart lover and I don't shop there because I don't like their junk ridden crappy merchandise filled isles that you can barely walk down without getting hit by a cart or bumping into another shopper. However, they do have every right to be in business and conduct their business as they (majority of the shareholders) see fit, as long as they are not breaking any laws.

Your argument about executive management salaries holds no weight in the United States, which by the way is a capitalistic country. I guess you would like to see the U.S. constitution changed to reflect your views of socialism, so the government can more strictly control, regulate and increase taxes on businesses.

There are some countries on this earth that support your socialistic views, but I don't see many U.S. citizens in a hurry to move there.

Bruce Bertsch 12 years, 5 months ago

If you bother to do some research you will find that the 8% Maryland law was well thought out and based on what it costs the State of Maryland to provide health coverage to Wal-Mart employees.

The US automakers have consistantly lobbied against national healthcare proposals which would reduce the cost of production by 1500-2500 per vehicle and make them more competitive. Hard to blame the UAW for that. The UAW has supported national healthcare.

I find it incredible that some think that Wal-Mart can not afford to provide suitable coverage for their employees. They simply don't want to, which is their choice. If I'm a taxpayer subsidizing a company making profits in the billions, I'm likely to want them to repay me for the subsidy.

badger 12 years, 5 months ago

Marion said:

"Uh, folks it is NOT the companies which offer the benefits through employee plans which set the prices for health care plans.

It is the insurance companies which are specifically exempted by law from things like FTC regulation.

Look there.

Follow the money."

Insurance companies decide what rate someone will have to pay for insurance, based on the size of the group, the demographics of the group, and what features the company wants available to its employees (if it wants employees to have a prescription drug plan, for example). The company itself cuts the check for each month's premiums en masse.

However, what companies decide is how much of that they will cover (for example, my company covers 100% of the insurance premium for employees, and a large percentage for employees + families), and what the ultimate cost to employees for the plan will be. It then removes that amount from the employee's checks each pay period.

So, in following the money, I find that it goes from the company to the insurance company, and in some cases (but not all) from the employee to the company.

Your universal 'follow the money' answer doesn't really wash in this situation, unless you're pointing out how insurance companies set ridiculous prices for insurance, and then some companies arrange percentages of corporate coverage to price people into welfare insurance - all so they don't have to pay as many policies when all is said and done, but still have the benefit of the 'available policies' when negotiating with the insurance company.

Linda Endicott 12 years, 5 months ago

The company I work for has frequently changed insurance companies to get what they want in health care coverage. My company insists that any insurance carrier they have covers pre-existing conditions. This is not the norm, to say the least. The company also pays the insurance premiums itself, with no cost to the workers. This also is not the norm.

I guess I'm pretty fortunate that way. Working conditions, however, are another matter.

mom_of_three 12 years, 5 months ago

If you go to the site, Wal-Mart has it noted that their employees are not on public assistance, and that their insurance is affordable - Public Assistance Health Care Coverage

"Fact: Wal-Mart does not encourage our associates to apply for public assistance. We will be the first to acknowledge that health care is a tough issue... for us and for the country. Wal-Mart has helped 160,000 Americans leave the ranks of the uninsured. A survey of Wal-Mart associates showed more than 30% did not have health insurance before coming to work at Wal-Mart. We work hard to keep our associate premiums affordable and think we are doing a pretty good job. Wal-Mart provides insurance to more than 1 million people and offers up to 18 different plans. Coverage is available for individuals for as little as $11 per month and 30 cents per day for children - no matter how many children an associate has."

It seems Maryland has already proved Wal-Mart wrong...Wonder if Wal-mart will change it's website....

Jamesaust 12 years, 5 months ago

"If you bother to do some research you will find that the 8% Maryland law was well thought out and based on what it costs the State of Maryland to provide health coverage to Wal-Mart employees."

Actually, it was not well thought out. While numbers certainly vary, 8% is approximately how much salary the average, high-wage job that DOES offer health insurance sets aside to subsidize health insurance. It makes no adjustment for those employers of any size who do not offer any insurance, nor for a variety of 'gold plated' wage and benefit deals worked out by the most fortunate of workers (think professionals, or unions). Nor does it adjust for those who have access to coverage but choose not to pay for it (Wal-Mart must actually spend the 8% not just offer its equivalent.)

Nor is it based upon ANY actual measurement of the cost to the State of inadequate employer subsidy. The State's theory is that via Medicaid it is being forced to take on liabilities that private employers could provide. That liability is no where near the 8% 'gold plated' number. Nor is there any admission that the lack of coverage has ANY other source than the Scrooge-like employer. (Its really like saying poverty exists because employers refuse to cut larger and more paychecks.) The bill's proponents have avoided a candid admission that their goal is that the lowest paid full-time worker should have the equivalent coverage of the average highest paid workers.

I should also point out that setting an 8% floor only diminishes the relative value of other benefit plans and would lead to efforts to enhance benefits further for those already with such benefits. And that assumes that a year from now there isn't a push to increase the 8% figure (don't we all want more, more, more?)

"The US automakers have consistantly lobbied against national healthcare..."

Actually, automakers have pointed out for years that foreign nations' health care subsidies provide an unlevel playing field in U.S. automakers' competition with Europeans, Koreans, and the Japanese. This includes General Motors, the nation's largest HMO plan (who happens to manufacture automobiles on the side).

Godot 12 years, 5 months ago

I've said this before and have been lambasted for it, but I still believe that health insurance is a contributing factor in the high cost of medical care, and vice versa. The costs of record keeping, filing claims and compliance with insurance company mandates is a major part of what we pay for health care. Furthermore, if health insurance were not available to pay for care, and if doctors were not working in fear of lawsuits, there wouldn't be as many tests and procedures performed. And then there is the effect of the discounts the medical providers give to people who use PPO's and HMO's; this makes the charges for people who are not in a PPO, or not insured at all, higher.

It is a vicous circle; I wish someone knew how to fix it.

Godot 12 years, 5 months ago

It would be an interesting experiment to establish a private medical practice that does not accept insurance or government assistance in any form, but, rather works on "retainer." Pay them $50 or $100 per month whether you go or not, but when you do go, you don't get a bill.

There is a practice in Johnson County where the doctors make house calls, only. They use laptops and blackberries to connect to a database for medical records, and use portable testing equipment. They don't accept insurance or medicare, and, therefore, don't have to have a back office operation; they work out of their homes. They are able to charge much less than other doctors, and they feel they are providing better care because they see patients in their home environment, and do not subject them to long wait and exposure to other illnesses in the waiting room.

Richard Heckler 12 years, 5 months ago

My speculation tells me Rep. Eric Carter is from this camp:

Beware: TABOR Is Coming

After devastating government services in Colorado, the "Taxpayer Bill of Rights" threatens to spread.


In 1992, after tireless nagging by Grover Norquist and his minions at Americans for Tax Reform, Colorado voters amended the state constitution to strictly limit the government's ability to raise revenue. The Taxpayer Bill of Rights, or TABOR, has forced Colorado to spend the last 13 years writing mandatory rebate checks to taxpayers, while vital education and human-service programs have been nearly choked to death. According to David Bradley and Nicholas Johnson at the Center on Budget and Policy Priorities (CBPP), for example, "between 1991 and 2003-a period in which the percentage of children who are uninsured declined nationally-the proportion of low-income children who lack health insurance in Colorado rose from 15% to 27%. Colorado now ranks 48th in its level of taxpayer support of colleges and universities, down from 35th in 1992."

Despite the pain TABOR has caused in Colorado, some 23 states were facing similar initiatives at the close of 2004. But Norquist's drive shows signs of floundering. "For businesses to be successful you need roads and you need higher education, both of which have gotten worse under TABOR and will continue to get worse," Tom Clark of the Denver Metro Chamber of Commerce told the Washington Monthly. "I'm a Republican," Clark said, "but I made the decision not to give any money to the state party." Likewise, Colorado Governor Bill Owens is having trouble garnering support from his own party's legislators, most of whom know their constituents no longer believe TABOR is a good thing. The anti-TABOR movement, meanwhile, continues to gain momentum, as the story of Colorado's misery begins to spread nationally.

Funded by the Right like Kansas Club for Growth out of D.C.

Godot 12 years, 5 months ago


Yeah, use of that word is the sign of a truly "non-biased" source.


mom_of_three 12 years, 5 months ago

ottr - it's not as easy to get another job to get better benefits. Most companies, i.e. retail, don't advertise their benefits as a draw to bring in employees. And full time employees have more access to benefits than full time (such as full time single is often free, but part time single isn't). You might even find a job with great benefits, but as with some companies, the benefits can change from year to year, as companies look for the best deal.
It seems health care and insurance companies are in this vicious cycle together.

concernedone 12 years, 5 months ago

The article states that Wal-Mart employees have 3 times the children on public assistance than the next largest employer, McDonalds.

Hmm...I wonder if that is because of most McDonalds employees are still on Mommy and Daddy's health insurance.

If a business over 10,000 employees must spend a minimum of 8% on health insurance, why not 9,999 or even 29?

If these people want to live in a socialist country, please move to one and stop trying to change mine from the capitalist nation where hard work can make anyone sucessful.

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