Why pick on Wal-Mart?
Editorial
LA Times
March, 2 2006
WAL-MART’S RECENT DECISION to offer health coverage to more of its 1.4 million U.S. employees is a little like getting a date with a favorite crush because she feels sorry for you. Sure, you’re happy to have it, but you wish it had happened for a different reason.
The retailing behemoth is only expanding employee benefits because so many state legislatures are bullying it to do so. Two months ago, Maryland passed the Fair Share Health Care Act, which requires companies with more than 10,000 workers to spend at least 8% of their payroll on healthcare or pay the difference to the state; only Wal-Mart is affected.
More than two dozen states have threatened similar legislation. In response, Wal-Mart has said it will try to increase the number of its insured workers — currently about half are covered — by significantly reducing the waiting period for new employees to qualify for coverage and by offering bare-bones health plans for as little as $11 a month.
This kind of legislative intimidation is bad for a couple of reasons. First, it’s arbitrary and unfair. Why not go after companies with 5,000 employees? Or 50? Or ones with employees who wear funny hats and ask, “You want fries with that?” Second, employer mandates don’t work. To make up for higher healthcare costs, Wal-Mart is likely to reduce salaries or other benefits. That’s partly why Californians two years ago rejected Proposition 72, which would have forced businesses with 50 or more employees either to insure their workers or pay a fee to the state.
It’s true that Wal-Mart is the nation’s largest private employer and that its approach to healthcare can have a disproportionate effect, much like its approach to retailing does. But it’s foolish to think that Wal-Mart alone can fix the deep problems afflicting the nation’s healthcare system. Although healthcare spending is expected to jump to $4 trillion in the next decade — to 20% of the nation’s gross domestic product — the number of uninsured is increasing by more than a million people a year, and Americans are no healthier than citizens of countries that spend half what we do. That’s the definition of bad medicine.
Fortunately, the public appears to be growing so tired of the problem that national healthcare reform is all but inevitable. Proposals range from a comprehensive overhaul to minor tweaks. More moderate reforms could simply increase the number of low-income adults eligible for existing public programs. And even after President Clinton’s disastrous healthcare reform proposals a decade ago, momentum is growing again for a “single payer” government agency that would insure everyone in the country.
Whatever Americans decide, they should understand that any serious reforms will require shared sacrifice. Meanwhile, shaming Wal-Mart or any other company into covering more of its workers isn’t necessarily productive. Employers alone didn’t create the American healthcare crisis, and they alone can’t solve it.