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PSN on September 28, 2006 - 8:46am
Prices are going up at Wal-Mart, for employees that is.
The company, already not known for generosity in benefits, is planning on eliminating many of their health care options, leaving workers with two choices: a high deductible plan and a Health Savings Account (HSA) plan. The plans are being called Value Plan and Freedom Plan, reminding us all once again of the fact that we now inhabit an Orwell novel.
The details of this news get horrific very quickly. When combining low wages with high deductible plans, scary things can happen. Wake-Up Wal-Mart's analysis indicates that a family depending on one of the offered plans from Wal-Mart could end up paying as much as 60% of their income to health insurance and that single workers could pay as much as 30%.
The company is claiming that the move will work better for most employees and save them money, but that is likely only for a very certain type of person -- young, single, and not chronically ill. Catastrophic coverage does not encourage preventive medicine and continuing to offer these backwards plans only increases the long-term likelihood of employees moving from Wal-Mart's health care system to having their costs covered elsewhere, either by public systems or through cost-shifting when they are unable to pay their bills.
The news that Wal-Mart is moving toward HSAs comes as a GAO study makes clear that these plans primarily benefit high-income workers, not the sort of employees one associates with Wal-Mart.
As we noted previously, there are alternatives. Even after a Maryland court ruled that the state's fair share health care bill, there is good reason to believe other states can find ways to implement stronger rules to shore up the employer-based health care system, rather than letting it slide further into disarray.