Wal-Mart feels the heat over healthcare benefits

BENTONVILLE, AK – Critics agree that the changes Wal-Mart has made in its 2008 healthcare benefits for associates are an improvement. But there are far more inherent problems with the new offerings. 

Although William Vaughan of the Consumers Union has not been following the company’s healthcare coverage closely, he said even a cursory glance at the new set of benefits reveals “some pretty serious gaps.”

“A significant number of their workers are part-time, and they are still excluded from coverage for the first year,” said David West, executive director of the Center for a Changing Workforce. “Given that Wal-Mart has anywhere from 30 (percent) to 50 percent turnover per year, half of the employees will never get healthcare insurance.”

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Wal-Mart is highlighting affordable premiums and generic drugs, but West said the real focus should be on employee wages and what their out-of-pocket costs are.

The most affordable plan with a $2,000 deductible still takes up 15 percent of an employee’s income.

The most expensive plan, with a $500 deductible and a $1,000 premium, equals 10 percent of a worker’s wages. “That’s double what most studies say would be affordable healthcare,” West said. “Workers would have to pay $1,500 out of pocket before they ever see healthcare.”

Although the Kaiser Family Foundation and Health Research and Educational Trust’s Employee Health Benefits 2007 Summary of Findings revealed the fourth consecutive year of a lower rate of growth for health insurance premiums, the lowest since 1999, the average premium increase of 6.1 percent exceeded workers’ earnings of 3.7 percent and the overall inflation rate of 2.6 percent.

Since 2001, premiums for family coverage have increased 78 percent, while wages have gone up 19 percent and inflation has gone up 17 percent, the report said.

“No matter how much they lower the premium, the real obstacle to people getting that care is the size of the deductible,” West said. “Wal-Mart says it values its employees, but it gives them Third World healthcare coverage.”

Two years ago, the center released a report that indicated the average store employee on Wal-Mart’s Associates Medical Plan is “underinsured” based on national standards. “In 2005, a Wal-Mart worker with a family of four would have to pay healthcare costs equal to 30 percent of their income before receiving most benefits,” the report noted.

Enrollment began in late September, and according to Wal-Mart spokesperson Sarah Clark, “It is too early to tell at this point, but by all indication, associates are excited by the new offerings.”