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IT WAS WAL-MART, IN ARKANSAS, WITH THE CORPORATE MEMO. That's that, then. Wal-Mart, the largest employer in America, has decided to cease offering traditional health care plans and move entirely to high-deductible, HSA-style offerings. Wake-Up Wal-Mart got their hands on some internal benefit memos, and here's what they showed:
Among the most striking findings outlined in Wal-Mart�s 2007 benefits booklet is the substantial health care cost a low-paid Wal-Mart worker would be forced to pay under the so-called �Value� plan. A typical individual Wal-Mart worker who enrolls in the Value Plan will face high upfront costs because of a series of high deductibles, including a minimum $1,000 deductible for individual coverage, a $1,000 in-patient deductible per visit, a $500 out-patient surgical deductible per visit, a $300 pharmacy deductible, and a maximum out of pocket expense of $5,000 for an individual per year.In total, when factoring the maximum out-of-pocket expense and the cost of the yearly premium ($598 a year for an individual under the Value Plan), a typical full-time worker (defined by Wal-Mart as 34 hours) who earns 10.11 an hour or $17,874 a year, would have pay nearly 30 percent of their total income for health care costs alone.Incredibly, the health care cost burden actually worsens should an uninsured Wal-Mart worker enroll their family under the Value Plan. Again, because of multiple deductibles for each family member, and when factoring in the cost of the medical premium ($780) and maximum out-of-pocket expense ($10,000), a Wal-Mart worker whose family is insured under the �Value Plan� could pay as much as 60 percent of their total income towards health care costs under Wal-Mart�s most �affordable �health care� plan.Yikes. This, of course, is only further evidence that it's time to stop asking Wal-Mart to offer decent health care -- which they will clearly not do -- and simply rip the responsibility away from them, ensuring all of their "associates" have generous, serious coverage they can fall back on. More worrisome, though, is that Target has promised the same move, which will mean that the two largest retailers will both eschew traditional health care plans for low-cost (to the company), high-risk (to the employee), astonishingly stingy offerings. Now, of course, any retailers who seek to compete with them -- and that includes supermarkets, clothing outlets, and all the rest -- will be at a competitive disadvantage if they fund traditional health care plans for their employees. It also means producers will be under added pressure by Wal-Mart and Target to make the same shift in order to lower their labor costs and, thus, prices. If the producers refuse, Wal-Mart can simply replace them with their in-house brands. This is how a race to the bottom starts. This is how employer-based health security dies.
