Bad Medicine: Walmart’s Rx for Employee Healthcare

walmart healthcareNow that Mitt Romney has clinched his position as the GOP presidential candidate, it’s time more than ever for Romney to avoid talking about the health care reform measure he created as Governor of Massachusetts.

You remember President Obama’s healthcare legislation, the Affordable Care Act (ACA), the one that passed through Congress as smoothly as a kidney stone, thanks to shrill conservative opposition? Key parts of that act were lifted straight from Gov. Romney’s measure, but Mitt can’t afford that association, given the Right’s steady vilification of the plan as “socialism.” Which is why Romney has been running around attacking “Obamacare” instead.

Some Republicans are reading the polls and surfacing the idea of legislation to replace the Obama Administration’s ACA.

It seems their idea is to retain the most popular aspects–covering young people until they are 26, close the Medicare “doughnut hole” that requires patients to pay more for their medications and guarantee coverage despite pre-existing conditions.

That pick-and-choose approach is not really possible, however – you need a large number of healthy people in the insurance pool to balance out the cost of those that use more resources.

But right-wing campaigners FreedomWorks and Club for Growth don’t like retaining any part, complaining that Americans need time “ to reflect on that fact that the Democrats basically rammed an unconstitutional bill down their throat.”

Sounds like something that might require an ER visit — another argument for reliablehealth coverage.

These two groups are flexing their muscles after recently kicking a little moderate GOP booty belonging to six-term Senator Richard Lugar of Indiana, where they backed Tea Party darling Richard Mourdock in his successful bid against Lugar.

Both FreedomWorks and Club For Growth espouse a Wild West, keep-your-labor-and-environmental-standards-off-me approach to government and commerce.

That would seem to make them kindred spirits to the World’s Largest Retailer, Walmart.

And wouldn’t you know it, this Raw Story article highlights Walmart’s contributions to climate change-denying candidates who wouldn’t dream of imposing regulations to curb greenhouse gas production. The megachain was also on the front line of opposing the Employee Free Choice Act that would make it easier for workers to organize.

But Walmart loses the don’t-tread-on-me attitude when it comes to ACA.

Walmart Hearts Obamacare

The world’s largest company shocked its retail industry brethren in 2009 when then-President (now CEO) Michael Duke joined labor leader Andrew Stern and John Poseda of the Center for American Progress to sign a letter of support for an employer mandate – under which companies either provide health insurance or pay a fee for every full-time employee that isn’t covered.

Walmart, famous for its scanty insurance coverage with steep deductibles and co-pays, and tricky eligibility requirements, co-signed a letter with a labor leader and a high-profile liberal? It did.

The position is entirely consistent with the world’s largest company’s modus operandi of looking out for Number One.

In his book The Retail Revolution—How Walmart Created a Brave New World of Business, Nelson Lichtenstein writes that Walmart calculated that an employer mandate would level the playing field by forcing all companies—those even more parsimonious than Walmart– to pony up for insurance. And Walmart’s support put the company at the table during the health care reform debate. “. . . Bentonville executives strategized that even if Wal-Mart did incur additional health benefit costs, these would be more than made up as the company enhanced its reputation and as it became an inside player in the epic legislative negotiations that ultimately framed the law whose impact on low-wage, low-benefit employees was so enormously consequential,” Lichtenstein writes.

And the final product ultimately works well for Walmart. “Quite likely they see the Affordable Care Act as a way for their workers to get coverage at no cost to them,” said Ken Jacobs, chair of the U.C. Berkeley Labor Center.

Under ACA, which goes into effect in January 2014 (if it isn’t derailed by the Supreme Court) employees can receive subsidized coverage if they are not offered job-based coverage, or if the plan costs more than 9.5 percent of an employee’s household income. In that case, Jacobs said, that worker can turn it down and receive subsidies to purchase more affordable coverage at a state exchange. Taxpayers carry the cost, not, in Walmart’s case, the retail giant.

It’s a way of shifting health care costs on to the federal government. Some part-time employees would use Medicaid, which has been a pattern for Walmart part-timers in the past. Historically, with long waiting periods to qualify for the company’s health coverage and a high employee-turnover rate, Jacobs said that “a large number of Walmart part-time workers who haven’t qualified for Walmart’s coverage or found it to be too expensive have turned to public programs for themselves or their children.”

In the fall of 2011, the company weakened its health insurance coverage, eliminating eligibility for future part-time workers who work fewer than 24 hours a week and excluding coverage of spouses for new-hires working 24 to 33 hours weekly. Under ACA, part-time workers with no insurance are covered through exchanges with subsidies or Medicaid—not by Walmart.

Walmart did not respond to a request for comment.

bobbi murrayFreedomWorks and Club for Growth can’t count on Walmart for back-up on the call to eliminate the healthcare reform passed in 2010. Walmart, an employer whose success was shaped by the globalization and the free market ideology espoused by the Reagan revolution, always looks out for Number One.

Bobbi Murray
The Frying Pan

Posted: Sunday, 10 June 2012

Published by the LA Progressive on June 10, 2012
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About Bobbi Murray

Bobbi Murray has reported on politics, economics, police reform and health-care issues for Los Angeles magazine, L.A. Weekly and The Nation.