Tuesday, May 31, 2005

Blue light special on health insurance

Does it bother you that Wisconsin taxpayers are shelling out $2.7-million a year to pay for health insurance for Wal-Mart workers, while the company makes $10.3-billion in profits?

That information, disclosed in a Journal Sentinel story last week, didn't seem to raise too many eyebrows or provoke much response.

Maybe it's a case of "What's good for Wal-Mart is good for the country." But that is hardly the case when it comes to employee benefits like health insurance coverage.

A combination of low wages, part-time workers, and long waits for employer-paid coverage result in 809 employees of Wal-Mart qualifying for BadgerCare, the state health program for the working poor. Taxpayers also picked up the tab for coverage of 443 dependents of those Wal-Mart workers.

That does not count the 3% of Wal-Mart employees who qualify for Medicaid, the health care program for the poor, elderly and disabled. That's another 1,952 people, including dependents, according to State Rep. Terese Berceau, who has introduced a bill to address the problem. She puts the total price tag at $4.75-million a year in state and federal taxes for Medicaid and BadgerCare.

All of this is especially relevant now because the state's Medicaid program is facing a $650-million deficit.

Wal-Mart is not the only company with workers on the BadgerCare rolls, but it is No. 1 on the list. Of the top 10 companies with workers getting Badger Care benefits, Wal-Mart accounts for 40% of those covered.

Jim Pugh of Wisconsin Manufacturers and Commerce (WMC), always quick to defend any bad business practices, says that's the way Badger Care is supposed to work, taking care of the low-paid and part-time workers who are working their way into jobs with benefits.

Here's the rub: It takes a full-time Wal-Mart employee six months to quality for health insurance. It takes a part-timer two years! And Wal-Mart is notorious for keeping people in part-time jobs and paying the lowest wages possible. If someone sticks it out two years, the company pays two-thirds of health insurance costs. But the worker's income is probably still low enough to qualify for BadgerCare, and the fact that the company pays less than 80% of the premiums means the workers are still eligible.

A Wal-Mart spokesman said you would expect to find Wal-Mart at the top of the list, because the company is the state's largest employer, with 26,000 workers.

OK, but the No. 2 company on the list, Aurora health care, has about one-fourth as many workers and dependents in BadgerCare as Wal-Mart does. Aurora has 25,000 employees. But it pays 80% of the cost of insurance for most of them, keeping them off the BadgerCare rolls.

So that's the problem. What's the solution?

Berceau's bill, co-sponsored by State Sen. Dave Hansen , would make big employers reimburse the state if it meets certain criteria. The bill is clearly aimed at Wal-Mart. Berceau release. A Capital Times editorial.

Maryland's legislature passed a similar bill, which was vetoed by the Republican governor but may be overridden. Maryland story.

Prospects of passage in the Republican-run legislature are slim and none, although even the GOP has begun to make noises about taking some action to ask companies to pay more of the costs. In a Journal Sentinel story, State Rep. Scooter Jensen and even Speaker SpongeJohn GardPants sounded open to doing something. Unfortunately, in the end it their "solution" will more likely be changing eligibility standards and kicking more people into the uninsured pool than making employers pay up.

But legislation often takes time, and several sessions, to come to fruition. In the meantime the Berceau-Hansen proposal will help shine a spotlight on the problem, keep the issue in the public eye, and perhaps embarrass Wal-Mart and others enough to make even some modest improvements in their current, inadequate benefit plans.

ANOTHER TAKE: Between the time I wrote this and got around to posting it, Folkbum checked in with added insights.

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