'Wal-Mart law' the wrong approach on health care
Don’t mandate coverage by only large companies.
By Register Editorial Board
Des Moines Register
January 17, 2006
While millions of people flock to shop at Wal-Mart every day, the company has also gained a flock of critics for running small stores out of business, paying low wages and forcing many of its employees to turn to taxpayer-financed programs like Medicaid for health care.
It’s easy to throw stones at such a big target. But the Maryland General Assembly went too far last week when it overrode the governor’s veto and required employers with more than 10,000 workers ? i.e., Wal-Mart ? to spend at least 8 percent of their payroll on employee health care or pay into a fund for the uninsured.
Maryland is the first state in the country to pass a “Wal-Mart bill,” but labor unions are pushing legislatures in at least 30 other states - including Iowa - to enact similar requirements. It should end there: The law is unfair because it targets only companies of a certain size. Of the state’s large employers, only Wal-Mart spends less than 8 percent on health care. Other government mandates, such as those requiring companies to pay minimum wage or honor medical leave, apply to all companies.
So why did Maryland do it?
“The taxpayers are giving a health-care subsidy to the largest retailer on Earth,” said Maryland lawmaker Kumar Barve.
But that rationale is misguided because it assumes providing health care is the responsibility of employers. It shouldn’t be. Employers don’t pay workers’ car insurance, homeowners’ insurance or grocery bills. They shouldn’t be responsible for picking up their health care tab, either.
Unfortunately, the twists and turns of this country’s history have led to employer-based health insurance. Following World War II, a labor shortage and wage-freeze led to some companies offering insurance as a “perk.” Now it’s become an expectation that burdens companies financially. Worse, it keeps workers in dead-end jobs they hate. It thwarts entrepreneurial spirit when people are forced to stay with a company solely because it provides health insurance.
The United States is alone in the world in tying jobs to health care.
The country should be moving away from employer-based health care and toward a tax-financed system that provides health care to all Americans, regardless of where or if they’re employed.
What has happened in Maryland should be a wake-up call to businesses all over America to get on board with reforming health care. The best action for employers to take: support the expansion of the existing, tax-financed Medicare program for seniors to cover all Americans.
Companies and workers could contribute to the Medicare fund through payroll taxes the same way they pay into Social Security. Because Medicare has lower administrative costs and covers a larger pool of people, that may be cheaper for companies than the premiums they’re currently paying to private insurance companies to cover workers.
Maryland lawmakers had good intentions. They want more residents to have access to health care. They’re tired of Wal-Mart employees ending up on the public dime. But the move is unfair to large business and, in the long run, detrimental to moving this country toward a single system of health care that covers all Americans.