The Wal-Mart Tax: Shifting Health Care Costs to Taxpayers

This report from the AFL-CIO examines Wal-Mart's practice of shifting costs away from the company and on to taxpayers. As the report states, "This abuse of poverty health care programs means Wal-Mart is directly contributing to the nation’s Medicaid crisis." From the introduction:

"As job-based health coverage declines and employers shift growing costs onto employees, workers are turning to taxpayer-funded programs such as Medicaid to get care for themselves and their families. Medicaid is wrestling with explosive cost growth, with total federal and state spending in 2006 expected to be 58.7 percent greater than in 2000. Medicaid is the fastest-growing expense for most states, accounting for 16 percent of state budgets, on average. States’ spending on the program is expected to increase 8.1 percent this fiscal year.

A number of factors account for Medicaid’s growing costs and caseloads, but a clear component is a decision by employers—including some that are highly profitable—to shift onto taxpayers the costs of insuring their workers.

To shine a light on large employers forcing others to pick up their health care tab, the AFL-CIO developed the model Health Care Disclosure Act, which requires states to report which employers’ workers are forced to rely on publicly funded health care. In 2005, legislators in nearly 30 states introduced the model bill. Five state legislatures (Colorado, Hawaii, Illinois, Massachusetts and Washington) passed the bill, and three states (Hawaii, Illinois and Massachusetts) enacted it into law.

In addition, public pressure from the AFL-CIO, unions and allies has resulted in 23 states reporting publicly on the extent to which employers’ workers utilize public health care programs to secure coverage for themselves or their families.

As of 2005, Wal-Mart was America’s largest employer, with 1.39 million workers.

Wal-Mart’s refusal to pay decent wages and provide affordable health insurance to its workers puts it atop the list in at least 19 of the 23 states surveyed here. This abuse of poverty health care programs means Wal-Mart is directly contributing to the nation’s Medicaid crisis."

Click here to download "The Wal-Mart Tax: Shifting Health Care Costs to Taxpayers."