November 01, 2004

Thank you, Wal-Mart

Today's NYT reports that Wal-Mart, the nation's largest employer, provides health insurance to only 58 percent of its "eligible" work force. Full-time workers have to wait 6 months to become eligible, and part-timers have to wait 2 years. These rules, plus the high turnover in the service industry, explains why Wal-Mart only covers 45 percent of its total workforce.

And you wonder where the low prices come from.

In our euphemistically-called "system" of health care, employment is the surest route to health insurance. Except if you're employed by Wal-Mart. Since Wal-Mart is the employer everyone else is trying to emulate--gaining market share by slashing prices, which is only possible by slashing labor costs--our entire employment-based health insurance system is probably heading in the direction of Wal-Martization. Only 45 percent coverage, that kind of thing.

Before we condemn Wal-Mart, we should consider that it may be doing us a favor. If its growing refusal to shoulder the burdens of health care coverage for its employees leads us to reevaluate our employment-based insurance system, we might want to say 'thank you.' Economic conditions in this country have changed dramatically since employment-based health coverage was instituted on a large scale in the middle of the last century. Jobs are not as permanent as they were before, and employers are under more global competitive pressures to keep prices (and labor costs) low. It makes much less sense now to expect employers to be the ticket to health insurance for America's population.

If employers don't do it, though, who should? In my opinion, that's a no-brainer. The United States should try to have the courage to resist its fear of creeping Communism, and recognize that the government is the proper entity to offer basic, universal health coverage to all its citizens.

With Wal-Mart sending its employees to "the state" for coverage, this is quickly becoming a fait accompli.

Posted by Carey at November 1, 2004 07:55 AM