Healthcare

"You can't create a team spirit when the situation is so one-sided, when management gets so much and workers get so little of the pie." - Sam Walton

In May 2006, Wal-Mart Watch issued A Handshake With Sam and called on Wal-Mart to set a national example by ensuring that all employees – salaried, hourly, full-time and part-time - have quality affordable health insurance that fully covers the employee and their children…Wal-Mart will actively promote full-time employment for its employees and discourage part-time hiring.”

Who pays for Wal-Mart workers' health care? Wal-Mart, right? No, we all do.

Despite Wal-Mart's mammoth profits, the company actually burdens us -- taxpayers -- with its workers' health care costs. In a disturbing nationwide trend, more state studies are revealing that Wal-Mart employees are the top recipients of taxpayer-paid health care. The scope of this corporate failure is massive: Wal-Mart is the largest private employer in the United States, with over 1.3 million associates, yet they fail to give health insurance to 54 percent of its employees.

"So here's how it works: Wal-Mart offers insurance, but aggressively shifts the cost onto its employees. The low-wage workers then pass up the unaffordable coverage and turn to the states. If this isn't exactly company policy, it is at least company philosophy. CEO Lee Scott, at the company's recent ''summit'' for the media, even described it. He said some state health programs are 'so lucrative that, in fact, it's hard to be competitive with them and certainly extraordinarily expensive to be competitive with them.'"
Editorial, Miami Herald 6/11/05

Background on Wal-Mart
Health Insurance Coverage

• Wal-Mart’s Health Insurance Covers Fewer than Half of its Employees. According to Wal-Mart’s own website, “In January 2006, the number of associates covered by Wal-Mart health care insurance increased to 46%.” [http://www.walmartfacts.com]
• Wal-Mart Health Insurance Coverage Lags Far Behind National Average. Nationally, 67 percent of workers in large firms (200 employees or more) receive their health benefits from their employer. More than 80 percent of Costco workers are covered by their company plan. [Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; New York Times, 10/24/05]
• Wal-Mart Coverage is Neither Affordable Nor Accessible. Wal-Mart provides health care options to their employees and families that have a deductible of $1,000 for individuals and $3,000 for families. Wal-Mart employees must endure long waits to qualify for benefits: six months for full-time employees and one year for part-time employees. [Wal-Mart 2006 Associate Benefits Book; Wal-Mart Press Release, 4/17/06]
• Wal-Mart Employees Still Wait Twice as Long for Health Care Coverage Than Workers at Other Retailers. The Wal-Mart average for full-time workers to qualify for benefits is six months, compared to the retail average of three months and the average waiting period for large firms (200 or more workers) of 1.5 months. [Wal-Mart 2006 Associate Benefits Book; The (Montreal) Gazette, 4/18/06; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust]
• Wal-Mart’s Health Plan is Filled with Hidden Charges. The Wal-Mart 2006 Associate Benefits Book details the specific policies of the Associate Medical Plan (AMP) and reveals that the plan is filled with additional charges. Standard services – including office visit co-pays, emergency room visits and ambulance services, per-event deductibles, and pharmacy co-pays – are not applied toward the standard deductible. [Wal-Mart 2006 Associate Benefits Book, pp. 32 and 38]

State Studies of Wal-Mart
Workers on Public Assistance

State	Year	Program	Enrolled	Yearly cost	Rank
Alabama1	2005	Medicaid	3,864 dependents	$1.7-$2.4 million	1st
Arkansas2	2005	Public Assistance	3,971 workers	$4 million	1st
Arizona3	2005	Medicaid	Almost 2,800 workers	--	1st
	2005	KidsCare (CHIP)	450 children	--	1st
California4	2004	Medicaid	--	--	*
Connecticut5	2004	Medicaid	824 workers	--	1st
	2004	Medicaid	204 children	--	1st
Florida6	2005	Medicaid	12,300 workers & dependents	--	1st
	2005	Healthy Kids & KidCare (CHIP)	1,375 children	$468,936	1st
Georgia7	2002	PeachCare (CHIP)	10,261 children	--	1st
Illinois8	2005-6	Medicaid	1,132 employees	$2.5 million	1st
Iowa9	2003-4	Medicaid	845 employees	--	1st
Maine10	2005	Medicaid	751 employees	--	1st
Mass.11	2005-6	State health insurance	3117 workers & 2813 dependents	$8.8 million	1st
	2003-4	State health insurance	823 workers & 1,656 dependents	$1.3 million	1st
	2002-3	Uncompensated Care	435 workers & dependents	$356,540	1st
Montana12	2004	CHIP	193 children of employees	--	1st
Nebraska13	2005	Medicaid	684 workers	--	1st
New Hamp.14	2005	Medicaid & CHIP	487 workers	--	1st
New Jersey15	2005	FamilyCare (CHIP)	71 workers & 538 children	--	1st
Ohio16	2005	Medicaid	12,184 employees & famliy members	--	1st
Pennsylvania17	2006	Medicaid	7,577 employees	$15 million	1st
Tennessee18	2004	TennCare	9,617 workers	--	1st
Texas19	2004	CHIP	2,611 families	--	1st
	2005	CHIP	2,333 families	--	1st
Utah20	2006	Medicaid and CHIP	234 workers	--	1st
Vermont21	2005	Medicaid	286 workers	--	1st
Washington22	2003	low-income health plan	341 workers	$651,992	1st
	2004	low-income health plan	281 workers	$475,452	1st
	2006	low-income health plan	over 3,100 workers	--	1st
W. Virginia23	2004	SCHIP	452 workers	--	1st
Wisconsin24	2004	BadgerCare	1,813 employees & dependents	$1.8 million	1st
	2004	Medicaid	1,952 children	(incl. above)	1st
	2005	BadgerCare	1,252 workers & dependents	$2.7 million	1st

Rhetoric vs. Reality
The Truth About Wal-Mart's
Health Insurance

RHETORIC: "Our Health Care Plans Are Affordable."

Wal-Mart will claim that they do offer affordable health insurance coverage to their workers.

REALITY: Wal-Mart’s Expensive Health Care Plan Forces Workers to Rely on Public Assistance

Wal-Mart knows that coverage is expensive for their workforce. A memo written by Susan Chambers, Wal-Mart Executive Vice President for Benefits, for the Wal-Mart Board of Directors, said: “[O]ur critics are correct in some of their observations. Specifically, our coverage is expensive for low-income families, and Wal-Mart has a significant percentage of associates and their children on public assistance.” [Susan Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New York Times, 10/26/05]

According to the Center for a Changing Workforce, in 2003, Wal-Mart employees paid 41% of insurance premium costs. At the time of the report, Costco employees paid about 10% of premium costs. Nationally, workers today pay an average of 16% of premiums for single coverage and 26% of premiums for family coverage. [Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust; Wal-Mart and Healthcare: Condition Critical, Center for a Changing Workforce, 10/26/05]

RHETORIC: "We Do Not Promote Public Health Benefits."

Wal-Mart will claim that their employees are only slightly more likely to collect Medicaid than average.

REALITY: Workers Rely On Public Health Assistance

Susan Chambers, Wal-Mart Executive Vice President for Benefits, for the Wal-Mart Board of Directors, recognized in a memo that Wal-Mart has “a significant number of Associates and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates’ children are on such programs, compared to a national average of 22 percent.” [Susan Chambers Memo to the Wal-Mart Board of Directors, http://walmartwatch.com/memo; New York Times, 10/26/05]

RHETORIC: "We Are Among A Small Number Of Retail Employers"

Wal-Mart will claim that they are among a small number of retail employers to offer health coverage to both part-time and full-time associates.

REALITY: On 46% of Wal-Mart Employees Receive Health Benefits

The percentage of associates covered by Wal-Mart health insurance in January 2006 was 46%. Sixty-seven percent of workers in large firms nationally receive their health benefits from their employer. [http://www.walmartfacts.com; Employer Health Benefits 2005 Annual Survey, The Kaiser Family Foundation and Health Research and Educational Trust]

RHETORIC: "We Are Have More Full-Time Workers"

Wal-Mart will claim that they have more full-time workers than typically found in the retail industry.

REALITY: Wal-Mart Seeks More Part-Time Workers

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1. Montgomery Advertiser, "Health Plans Not Family Friendly," 2/22/05; Federal Medical Assistance Percentages, Fiscal Year 2004 Estimate, http://aspe.hhs.gov/health/fmap04.htm
2. Arkansas Democrat-Gazette, "Top 9 employers in state have 9,698 getting public aid 3,971 of them work at Wal-Mart," 3/17/05; Federal Medical Assistance Percentages, Fiscal Year 2004 Estimate, http://aspe.hhs.gov/health/fmap04.htm
3. Arizona Republic, "Nearly half of poor in AHCCCS hold jobs," 7/30/05; Arizona Republic, "Working Poor Swell AHCCCS Rolls," 1/01/05
4. UC Berkeley Labor Center, Workers in California, 8/2/04
5. Associated Press, "Report shows large firms relying on state health plan for poor," 3/3/05; http://www.huskyhealth.com/about.htm
6. St. Petersburg Times, "Lured employers now tax Medicaid," 3/25/05; Enhanced Federal Medical Assistance Percentages, Fiscal Year 2004 Estimate, http://aspe.hhs.gov/health/fmap04.htm
7. Atlanta Journal-Constitution, Wal-Mart stands out on rolls of PeachCare, 2/27/04
8. Chicago Tribune, Workers' care falls to state, 10/7/06
9. Associated Press, "845 Wal-Mart employees on Medicaid in Iowa," 3/4/05
10. Institute for Local Self-Reliance Press Release, 6/28/05, http://www.newrules.org/retail/news_slug.php?slugid=311
11. Massachusetts Office of Health and Human Services, "Employers with 50 or More Employees Using Public Health Assistance in FY06, 2/107; "Executive Office of Health and Human Services, "Employers Who Have 50 or More Employees Using Public Health Assistance," 2/1/05, http://www.mass.gov/Eeohhs2/docs/dhcfp/pdf/50+_ees_ph_assist.pdf; List of Companies, http://www.mass.gov/Eeohhs2/docs/dhcfp/pdf/50+_ees_ph_assist_ss.pdf
12. Great Falls Tribune, "State insurance for kids going to employees you might not expect," 6/26/05
13. Omaha World-Herald, "Many with jobs are on Medicaid rolls," 10/19/05, http://www.omaha.com/index.php?u_pg=1642&u_sid=2047614
14. Associated Press, State, retail workers high on list of needing health-care subsidy, 5/12/05
15. New Jersey Policy Perspective, http://www.njpp.org/rpt_familycare.html
16. Ohio Department of Job and Family Services, Report Identifying the Number of Benefit Recipients by Employer, 2/24/06; Julie Carr Smyth, “Ohio workers depend on public benefits; Wal-Mart, McDonald’s employees top list,” Plain Dealer (Cleveland), 2/25/06; Policy Matters Ohio, Public benefits at Ohio employers: An initial analysis, 3/1/06
17. Philadelphia Inquirer, "Many Wal-Mart workers use Medicaid," 3/02/06
18. Chattanooga Time Free Press, "On the Job and on TennCare," 1/20/05
19. Good Jobs First by Center for Public Policy Priorities. http://www.goodjobsfirst.org/pdf/texaschip.pdf
20. Salt Lake Tribune, "Utahns foot insurance bill," 2/5/06
21. Vermont Guardian, Employees at Vermont's Top Companies Enrolled in Medicaid Health Plans, 4/18/05, http://www.vermontguardian.com/local/0105/MedicaidEmployees.shtml
22. Associated Press, "Lawmakers blast businesses for sponging off state health care," 2/27/03; Seattle Times, "Enrollments in state's health plan questioned," 2/3/04; Seattle Times, "Over 3,100 Wal-Mart workers got state health aid," 1/24/06
23. Charleston Gazette, "Wal-Mart Culture: Wal-Mart Tops State CHIP list; Retailer Stands Out in Program for Uninsured Kids," 12/26/04
24. The Capital Times, "Wal-Mart Workers Need State Health Aid," 11/4/04' Milwaukee Journal Sentinel, "Big companies fill BadgerCare rolls," 5/24/05

Key Quotes From The
Wal-Mart Secret Memo

On October 26, 2005 the New York Times reported a "secret" memo written by Susan Chambers, Wal-Mart Executive Vice President for Benefits, for the Wal-Mart Board of Directors. The memo shattered Wal-Mart’s healthcare mythology and revealed that the company executives are strategizing to implement policies that intentionally benefit its bottom line over the welfare of employees. The most egregious revelations of the memo include:

• ON ASSOCIATES … Chambers wrote, "Most troubling, the least healthy, lease productive Associates are more satisfied with their benefits than other segments and are interested in longer careers with Wal-Mart." [Wal-Mart Secret Memo, Page 4, http://walmartwatch.com/memo; New York Times, 10/26/05]
• ON SPOUSES … Chambers wrote, "Decrease cross-subsidization of spouses through higher premiums or other charge. Spouses are by far the most expensive plan members to cover, and Wal-Mart pays more per spouse than per Associate." [Wal-Mart Secret Memo, Page 6, http://walmartwatch.com/memo; New York Times, 10/26/05]
• ON CHILDREN … Chambers wrote, "We also have a significant number of Associates and their children who receive health insurance through public-assistance programs. Five percent of our Associates are on Medicaid compared to an average for national employers of 4 percent. Twenty-seven percent of Associates’ children are on such programs, compared to a national average of 22 percent. In total, 46 percent of Associates’ children are either on Medicaid or are uninsured." [Wal-Mart Secret Memo, Page 6, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]
• ON "UNHEALTHY PEOPLE" … Chambers wrote, "A healthier workforce will lead to lower health insurance costs, lower absenteeism through fewer sick days, and higher productivity. It will be far easier to attract and retain a healthier workforce than it will be to change behavior in an existing one. These moves would also dissuade unhealthy people from coming to work at Wal-Mart. Even a healthier workforce could result in significant savings: $220 million to $670 million in FY2011." [Wal-Mart Secret Memo, Page 10, http://walmartwatch.com/memo; New York Times, 10/26/05, emphasis added]