Obamacare Causes Walmart To Roll Back Its Employee Health Insurance
I, along with many others, complained bitterly a bunch of years back about Walmart sticking taxpayers with their employees' health care costs -- and then they mended their ways. Well, their ways have been unmended, thanks to Obamacare.
From the HuffPo's Alice Hines (and the who couldn't have predicted that files), Walmart's new health care policy shifts the burden to Medicaid:
Labor and health care experts portrayed Walmart's decision to exclude workers from its medical plans as an attempt to limit costs while taking advantage of the national health care reform known as Obamacare. Among the key features of Obamacare is an expansion of Medicaid, the taxpayer-financed health insurance program for poor people. Many of the Walmart workers who might be dropped from the company's health care plans earn so little that they would qualify for the expanded Medicaid program, these experts said."Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured," said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley.
For Walmart, this latest policy represents a step back in time. Almost seven years ago, as Walmart confronted public criticism that its employees couldn't afford its benefits, the company announced with much fanfare that it would expand health coverage for part-time workers.
But last year, the company eliminated coverage for some part-time workers -- those new hires working 24 hours a week or less. Now, Walmart is going further.
"Walmart likely thought it didn't need to offer this part-time coverage anymore with Obamacare," said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. "This is another example of a tremendous government subsidy to Walmart via its workers."
I saw the other day that the six Walton heirs have a combined net worth greater than the lowest 42% (130 million people) of all America!
http://www.motherjones.com/mojo/2012/07/walmart-heirs-waltons-wealth-income-inequality
Eric at December 3, 2012 7:19 AM
Lots of companies are doing this, particularly in the food services industry. You can't really blame them for arranging their affairs to minimize their costs.
Snoopy at December 3, 2012 7:37 AM
I still fail to see why employers should be obligated to provide *any* medical insurance for their employees. Should they provide room and board too? Maybe a company car? Free wi-fi?
If people want insurance, let them buy it themselves. If it's too expensive then, given the popularity of the product, there's a market distortion somewhere driving up the price. Insufficient competition most likely, which is what you'll get when you segregate a national market into 50, closed, sub-markets.
Jason at December 3, 2012 8:32 AM
Ironic, for years employer health insurance indirectly subsidized Medicaid and Medicare, since the govt program payment rates were so low. Pay back is a bitch.
How much does lasik surgery cost? How much does it cost to have a boil lanced? The difference, no govt, employer or individual health insurance covers lasik, so free market works. Doctors figure out how to do the procedure cheaply and efficiently.
Bill O Rights at December 3, 2012 9:06 AM
Amy Alkon
http://www.advicegoddess.com/archives/2012/12/03/obamacare_cause.html#comment-3500036">comment from JasonI still fail to see why employers should be obligated to provide *any* medical insurance for their employees.
I agree with you. Untying health care from the workplace -- in an age when almost nobody works at a single company for a lifetime -- was something that Obamacare, stupidly, idiotically, failed to do.
When I wrote above about Walmart sticking taxpayers with health care costs, it was because employees were so low-paid they couldn't afford it -- not because I think businesses should provide it.
I've paid out-of-pocket, monthly, for my health care since my early 20s. I'm "in" in my plan and can't be kicked out unless I stop paying. (I purposely found a plan like this, figuring I'd better allow for lean years, which we're in now and may never get out of.)
Amy Alkon at December 3, 2012 9:40 AM
And those richer-than-Croesus Waltons were massive donors to the Obama campaign. Hmm. How about that.
BlogDog at December 3, 2012 10:27 AM
> I saw the other day that the six Walton heirs
> have a combined net worth greater than the lowest
> 42% (130 million people) of all America!
I saw the other day that if you’ve no debts and have $10 in your pocket you have more wealth than 25 percent of Americans. My little kid is grotesquely wealthy!
http://www.politifact.com/truth-o-meter/statements/2012/jul/31/bernie-s/sanders-says-walmart-heirs-own-more-wealth-bottom-/
Snoopy at December 3, 2012 10:36 AM
Jason: "If people want insurance, let them buy it themselves. If it's too expensive then, given the popularity of the product, there's a market distortion somewhere driving up the price. Insufficient competition most likely, which is what you'll get when you segregate a national market into 50, closed, sub-markets."
It is not just the 50, closed sub-markets, it is also the fact that governments (both state and fed) monkey with the prices and coverage too damn much. So much government hands all over the health insurance market that it really isn't a "free market" anymore.
I totally agree with Amy, we need to do something to get insurance NOT tied to employment and truly be a free market item, then, and only then will folks be able to get decent coverage at an affordable cost.
Lastly, folks need to change their attitude about health insurance. It should be insurance, there to cover the expensive stuff; not there to cover every little cost that someone incurs.
Charles at December 3, 2012 11:08 AM
Ms Alkon: "...employees were so low-paid they couldn't afford it [medical insurance]..."
Why should Walmart, or any employer of unskilled laborers, pay two or three times the minimum wage or more, plus insurance and other benefits, for work that a 14-year-old can handle? We shouldn't expect that people working in unskilled occupations, such as Walmart's or McDonalds' entry level, will be paid enough to support themselves, let alone a family, and buy medical insurance.
Those are entry level jobs for high school kids and college students who don't yet need to make a living or support a family. They just need to begin learning how to get a job, go to work, earn a little money, get a paycheck, pay taxes, etc., and experience what it's like to have a little money in their pocket that they earned themselves, and that is 100% rightfully theirs to spend however they please.
It's important for kids to begin working, at least part time, in their early teens, when they don't yet need to support themselves, so that by the time they're out of high school they have some work experience, maybe even some real skills, a resume and some good references, and can ask for more than minimum wage and get it. In most of the places I've worked, including where I work now, there are 18-20 year-olds who had four or five years of verifiable work experience and references when they applied, and the employers were glad to hire them and pay them enough to support themselves.
Maybe instead of trying to make more laws that increase length and number of school days, and increasingly restrict where, when and for whom teenagers can work, states should pass laws making high school days shorter and fewer, and encouraging teenagers to find part time jobs and gain work experience.
Ken R at December 3, 2012 1:23 PM
The federal government continues to explore macroeconomics by doing massive experiments on the populace. Feel like a guinea pig yet?
Consider an employer of more than 50 full-time workers. The penalty "on the employer" for not providing health insurance is a complicated brew, up to $2,000 per employee. We will be able to measure experimentally the comparative elasticity of labor supply, labor demand, and investment demand. In simpler terms, we will find out how much of the penalty creates lower wages, creates a lower return on investment (and less investment in new jobs), and/or produces higher prices. The data will be a boon to economics professors, who will study it for years.
It may seem that the employer is paying for most of health insurance. But, all costs of employing people, including health insurance, are paid for out of the production of the employee. If the employer did not pay for health insurance, then that part of employee compensation would be paid in cash, through competition for workers.
The penalty, supposedly on employers, will mostly reduce the employee's benefits and cash wage by $2,000 yearly. Any increase in insurance costs mandated by ObamaCare will also mostly reduce cash wages. Companies are finding ways to limit their costs under ObamaCare because they don't want to directly reduce wages and they want to stay in business.
Ironically, if an employer-provided health benefit now costs more than $2,000, the employee's salary might go up by the savings. But, the employee will then have to buy insurance at an exchange. The employee is effectively taxed $2,000 at work, to be given a subsidy at the exchange. People will never understand this complexity.
Many employers want to entirely escape these taxes which must fall on the worker. Their workers can't afford the reduction in cash salary which would result from participation in Obamacare. Their workers would quit to work for some other company (of less than 50 full-time workers) who could offer a larger salary.
ObamaCare is designed to put the employer in the middle, so that workers will be angry at the employer for any problems. This is part of the anti-business stance of Team Obama. The eventual failure of ObamaCare will be blamed on supposedly greedy businessmen who would not supply reasonable insurance to their employees. But, it is entirely government failure.
Company Paid Health Insurance is Part of Your Salary
The employee earns his health benefits as part of what he is paid. The employer writes the check for him.
( econlog.econlib.org/archives/2010/03/obamacare_what.html )
Obamacare: What the Future Holds
03/23/10 - Econlog by Bryan Caplan - A review of ObamaCare penalties and incentives.
( heritage.org/research/reports/2011/01/obamacare-and-the-employer-mandate-cutting-jobs-and-wages )
ObamaCare will cut jobs and wages
01/2011 - Heritage - The effects of ObamaCare
Andrew_M_Garland at December 3, 2012 3:09 PM
Too many states have too many requirements that have to be funded by the rest of the insured in the pool. Such as diabetes coverage. Or the requirement for breast re-construction for mastectomy patients. The new requirement to pay birth control and other female reproductive services. If you think just the female insured are paying higher premiums, I want what drugs you are taking?
And that waiver for the religious institutions -- it is only for one year -- period, end of sentence.
Jim P. at December 3, 2012 6:45 PM
So, is this about wealth envy or health care?
Blue Cross, Blue Shield benefits also go down by significant fractions in the coming years.
Politicians have no penalties for skillful lying, but the health care providers have to tell the truth in numbers.
Meanwhile, you should not only not listen to those who tell you government involvement will somehow pay doctors better, you should tell them they're lying.
Radwaste at December 3, 2012 7:01 PM
Hey Rad,
Jim P. at December 3, 2012 9:16 PM
Ken R you forget people that will and can never rise above menial jobs due to their inherent talents. These people need to live and eat too and they'll always be around. We cant just rely on "young people". I for one was making $12 an hour PLUS under the table money at 18.I have no problem with them making more money. I don't mind paying more for products just like I don't mind paying more for produce if it means less illegal immigrants.
I don't want to subsidize Walmart and I'm tired of their shitty Chinese made shit. I want health care out of the employers hands and I want people to make a livabale wage so they can pay their own shit. I don't want to susbsidize anything ok?
(And no I do not want to make wage laws)
Purplepen at December 4, 2012 12:17 AM
Also when your employer pays your insurance they will use that against you when it comes to monetary/vacation negotiations.
They have power over you and that is something nobody wants.
Purple pen at December 4, 2012 12:21 AM
Purplepen, I doubt you could afford the computer you are typing on if it weren't for "shitty Chinese made shit."
Nobody wants to acknowledge the benefits, just the costs. How about those new iPads? Those smart phones? I could go on forever, but I'd guess they would cost at least quadruple the current price if they were made in the US, subject to our labor and environmental laws.
How'd you like to see the big three without any competition? I bet your car would cost double what it does now.
I had a solidly middle class childhood, but the poor now live better than we did then. WalMart has done more to reduce poverty than the Feds ever have, or ever will.
MarkD at December 4, 2012 4:47 AM
I will remember that each time our debt to the Chinese gets higher.
Purple pen at December 4, 2012 8:10 AM
@Purple pen:
Not much of what you said makes any sense.
Why do you think you're subsidizing Walmart? Is it because some of its employees qualify for Medicaid? Medicaid doesn't subsidize Walmart; the money is paid to health care providers for services rendered to people who receive Medicaid benefits. Walmart doesn't have any control over how Medicaid is run or who qualifies for benefits. It doesn't participate in the transactions between health care providers, Medicaid recipients and the various government entities that administer the Medicaid program. In the case of Walmart employees on Medicaid, their healthcare is "out of the employers hands" as you say you prefer (I prefer that too).
As you point out, there are people who "will and can never rise above menial jobs due to their inherent talents." You "want people to make a livabale wage so they can pay their own shit." The fact is, some people never did anything to acquire the job skills they need to be productive enough to justify paying them a livable wage. Others have physical or mental limitations that make them unable. In order to survive, those people need to be subsidized to some extent by someone else. You say you "don't want to susbsidize anything..." I understand that. I think it's good to help out people who are struggling to get by, but it's no more Walmart's responsibility than it is yours or mine. People like you and me, and companies like Walmart, should be free to subsidize whomever we choose to, or no one.
You "...don't mind paying more for products...". You should be free to pay more to your heart's content. I'm glad you can afford to. For many people higher prices would mean going without things they need.
You're tired of Walmart's "shitty Chinese made shit". Then don't buy it. Walmart is a huge, successful company because its products and prices please masses of people, including me.
I advocate encouraging kids in their early teens to find part time jobs and start acquiring job skills long before they need a livable wage, so that by the time they do need to earn a livable wage, they can.
Ken R at December 4, 2012 10:49 PM
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