Wal-Mart To Balance Health Care for Employees and Cost Cutting By Eliminating Health Insurance for New Part Time Workers

Balancing on a Crooked Scale

A key Republican doctrine is that the private sector can get low cost health insurance with competition in the health insurance market.  Wal-Mart is a huge company, and if anybody could leverage the buying power for health insurance in the private market, then it would be a company like Wal-Mart.  So what is Wal-Mart doing about health insurance for its employees?

Citing rising costs, Wal-Mart, the nation’s largest private employer, told its employees this week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company’s health insurance plans.

But wait, there’s more

In addition, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered.

And what does Wal-Mart have to say

Greg Rossiter, a Wal-Mart spokesman, said the decision to deny coverage to new part-time employees resulted from the company’s revamping of its health care offerings in light of rising costs.

“Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different,” Mr. Rossiter said. “We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

So the balance between managing costs and providing quality care and coverage is struck by providing no care or coverage.  Does anyone think that maybe that “balance” is tilted in favor of Wal-Mart.  And for employees that do have coverage there is this.

In Wal-Mart’s 2012 health offerings, premiums will increase for some plans by more than 40 percent, although many of their workers pay relatively low premiums in comparison to more generous plans offered by other employers. But many Wal-Mart employees complain that their low premiums are accompanied by high deductibles that sometimes exceed 20 percent of their annual pay.

One thing positive in all of this is that Wal-Mart does charge higher premiums for insurance for those who smoke.

Wal-Mart’s new health offerings will require many employees who smoke to pay a significant penalty. They will be required to pay an extra $10 to $90 each pay period — $260 to $2,340 a year — if they want health coverage.

And no, the sympathy of The Dismal Political Economist does not extend to smokers whose damage to themselves, to others and to the overall health of the health care delivery system in the U. S. is huge.  But it does extend to the millions of people who will have the same experience as the Wal-Mart employees if Republican plans for health care are enacted.