Health Progress and Policy
News About Employer Coverage
• What's Hurting GM Is Hurting America (11/22/05)
• Under the Radar (11/21/05)
• Under the Radar (10/26/05)
• You Can Do Something About Gas Prices (9/14/05)
• A Call For Accountability At Wal-Mart (6/23/05)
• Under the Radar (6/2/05)
• Ehrlich Gain Is Maryland's Loss (5/23/05)
• Sickening Priorities (5/10/05)
• Pay Cut Hits (Most Of) America Hard (4/12/05)
• Under the Radar (2/14/05)
• PR Offensive (1/14/05)
• Under the Radar (10/28/05)
What's Hurting GM Is Hurting America (11/22/05)
THE HEALTH CARE CRISIS: A leading cause of General Motors layoffs is our country's health care crisis. "GM's problem," the New York Times reports, "at least in terms of its costs, is the enormous price of health care benefits for hundreds of thousands of retirees. G.M. is the largest private provider of health care, covering more than a million Americans." The trouble isn't that autoworkers have had too good a deal on health insurance -- it's that "most Americans have had too bad a deal." As Robert Kuttner writes, "Somehow, the rest of the industrial world can provide health coverage for everyone and only spend an average of about 10 percent of its national income," while America spend 15 percent and leaves over 46 million people without health insurance. One innovative way to start to address the auto industry's problem: health care for hybrids. American Progress has proposed a plan, now embraced by Sen. Barack Obama (D-IL) as the Competitiveness and Accountability Act, that would "offer automakers the following deal: If they invest substantially in fuel-efficient technology, Congress will relieve them of the health insurance burden of their retirees." (American Progress also has a systemic plan to provide affordable health insurance to all Americans.)
Under the Radar (11/21/05)
HEALTH CARE -- WAL-MART BEEFS UP LOBBYIST STABLE TO HELP SINK HEALTH BENEFITS BILL: "With a nation watching, Wal-Mart has ramped up its opposition to a groundbreaking bill that would force the retail giant to offer better benefits, a step that could be replicated in state houses across the nation next year," the Baltimore Sun reports. "A dozen lobbyists, nine of them hired in the past six weeks, now represent Wal-Mart in the [Maryland] state capital, two months before lawmakers will consider whether to override Gov. Robert L. Ehrlich Jr.'s veto of the bill." The Fair Share Health Care Act would require companies with more than 10,000 employees to "to spend at least 8 percent of their payroll on worker health care or pay the difference to the state." "Wal-Mart is the only company in the state with that many employees that does not meet the 8 percent threshold."
Under the Radar (10/26/05)
WAL-MART -- ROLLING BACK BENEFITS: According to the New York Times, "an internal memo sent to Wal-Mart's board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer's reputation." The secret memo, uncovered by Wal-Mart Watch, contained ideas on how to avoid paying benefits by hiring more part-time workers (to keep from having to pay benefits), slashing 401(k) contributions, "discouraging" the hiring of workers with health problems, and focusing on hiring newer workers (since employees with seniority are eligible to earn more). In the memo, Chambers acknowledged that she knew "46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid."
You Can Do Something About Gas Prices (9/14/05)
HEALTH CARE FOR HYBRIDS: United States automakers are falling behind foreign competitors in large part due to the burdens of providing health care. (The Big 3 car companies, Ford, GM and Daimler-Chrysler, will spend $6.7 billion on retiree health care in 2005.) This is a drain on investment funds and leads to massive layoffs. American Progress teamed up with the Breakthrough Institute and the NRDC to address this growing crisis while promoting action to reduce oil consumption. The idea, which is being explored by Rep. Jay Inslee and Sen. Barack Obama, is to offer health care cost relief to car companies in exchange for developing more efficient vehicles. Investing in assistance for retiree health care costs, for example, would make it "possible to save over a million barrels of oil a day, while improving the competitiveness of U.S. business and the retirement security of American workers." (Read the details here.)
A Call For Accountability At Wal-Mart (6/23/05)
At Walmartfacts.com -- a website set up by the retail giant -- you'll learn the company had $285.2 billion in sales last year, opposes strengthening child labor laws in Connecticut and hides the cover of Marie Clair magazine with a sheet of plastic. One statistic you won't find: how many of its employees are forced to enroll in Medicaid for health coverage. Inquiring minds want to know. Yesterday, Sen. Ted Kennedy, Sen. John Corzine and Rep. Anthony Weiner introduced the Health Care Accountability Act which would require "states to report annually on the number of workers relying on taxpayer-funded health programs." Kennedy said "[p]programs like Medicaid provide a critical safety net for low-income women and children, the disabled, and the elderly and shouldn't be a profit center for large companies like Wal-Mart." Kennedy and the other bill sponsors estimate that 600,000 of Wal-Mart's 1.3 million workers do not have company insurance. As a result "[e]very worker in America is paying a part of their taxes to pay for Wal-Mart." While the bill stops short of requiring large companies to provide affordable health coverage for their workers "it would shed light on their practices." For the latest, check out walmartwatch.com.
WAL-MART SPOKESMAN TOUTS MEDICAID AS A GOOD OPTION FOR WORKERS: The corporate PR department at Wal-Mart doesn't know what all the hubbub is about. Company spokesman Nate Hurst said some uninsured Wal-Mart workers, "may turn to state Medicaid programs which were designed to provide medical coverage at very low cost to relatively low-income residents, at better premiums and related costs than even Wal-Mart can negotiate." While Wal-Mart touts Medicaid as an option, it doesn't offer health coverage to part-time employees until they've worked for two years. Full-time employees can't get coverage until they've worked six months. Once they become eligible, many employees find they can't afford coverage. In Georgia, which was the first state to start collecting data, "more than 10,000 Wal-Mart employees [are] on a state health care program." No other employer in the state had more than 700 employees enrolled in the state program.
WAL-MART SAY IT SUPPORTS TRANSPARENCY, HAS BEEN LOBBYING AGAINST SIMILAR MEASURES: It's hard to oppose accountability, so Wal-Mart tried to position itself as broadly supportive of the effort. Hurst said "[w]e encourage transparency..." Behind the scenes Wal-Mart takes a different approach. The Washington Post reports "the company lobbied against legislation in Minnesota that would show which employers have been a drain on the state's health care system." USA Today notes Wal-Mart, in partnership with state chambers of commerce, has been lobbying against similar bills in numerous states.
WAL-MART BUYS OFF MARYLAND GOVERNOR:In Maryland, Gov. Robert Ehrlich (R) vetoed a more muscular bill which would have forced large companies "to boost spending on employee health benefits or make a contribution to the state's insurance program for the poor." Wal-Mart held a $1,000 per person fundraiser for Ehrlich and donated $4,000 directly to Ehrlich at the start of Maryland's legislative session. Ehrlich claimed the donations, and Wal-Mart, had nothing to do with his decision. But on the day he issued the veto, the chief operating officer of Wal-Mart Eduardo Castro-Wright was by his side. Ehrlich shook his hand before he dropped his veto pen.
Under the Radar (6/2/05)
HEALTH CARE – WHAT IS WAL-MART HIDING?: Wal-Mart doesn't want you to know how many of its workers are forced to rely on public assistance for health care. The mega-store is fighting a new bill in Minnesota which would create "a public list of companies whose workers are enrolled in MinnesotaCare and other government-funded health care programs." Last year, Minnesota spent $270.2 million on MinnesotaCare, the state program for people without access to affordable health care. This led lawmakers to wonder which corporations have the most workers enrolled in the state-funded program: "If it's true what people say, that big multinational companies are outsourcing health care to taxpayers, then it would be good to have a handle on which ones," said state Rep. Sheldon Johnson. Other states recently have exposed the Wal-Mart drain: Wisconsin last week reported Wal-Mart employees "topped the list of BadgerCare recipients, a state health care program for low-income residents."
Ehrlich Gain Is Maryland's Loss (5/23/05)
MARYLAND'S LOSS – HEALTH CARE FOR WAL-MART EMPLOYEES: Last week, Ehrlich also rejected a bill that would have forced Wal-Mart to use more of its profits to provide better employee health care. The measure would require the megastore to spend at least 8 percent of its payroll on health benefits or pay the difference to a state fund. It would have helped nearly 600,000 Maryland residents who lack health care.
Sickening Priorities (5/10/05)
Washington conservatives are firmly placing their boot onto the necks of the most vulnerable Americans – poor children, the elderly, pregnant women, and people with HIV/AIDS. Under the cover of high-profile fights over Social Security privatization and judicial filibusters, Congress has voted to slash Medicaid – the country's premier health program for the poor – by $10 billion over the next five years. Now, with the budget-crunching over, governors and state legislators have devised "sweeping changes" to deal with Congress's cuts, under which many low-income Americans will have to pay more for care and states will have "more latitude" to reduce and limit services. Governor Mike Huckabee (R-AR) put these priorities in perspective: "[T]o balance the federal budget off the backs of the poorest people in the country is simply unacceptable. You don't pull feeding tubes from people. You don't pull the wheelchair out from under the child with muscular dystrophy."
FISCAL RESPONSIBILITY A LA CARTE: Why target Medicaid to begin with? Conservatives claim it's all about reducing the federal deficit, and point to the fact that federal and state spending on Medicaid has "grown an average of 10 percent a year over the last five years – much faster than federal or state revenues." But the reasons behind that growth show that targeting Medicaid is regressive and unnecessary. Medicaid has actually "contained spending, limiting annual per capita growth to 6.7 percent between 2002 and 2004," compared to 12.5 percent for private health insurance premiums. Its overall costs have increased because "enrollment grew by nearly 40 percent since 2000" thanks to the recession that "left many families without health coverage, squeezing states." Without Medicaid, the number of uninsured would have been much higher. Meanwhile, conservatives have cleared the way for $106 billion in new tax cuts over five years (as part of a budget that will "increase deficits over the next five years by $168 billion") while moving forward with pork-packed energy and transportation bills.
PICKING ON THE WEAK: So what's the real reason for going after Medicaid? Political analysts say "congressional leaders picked a program whose low-income beneficiaries were relatively less politically active. 'The poor and the disadvantaged do not vote,' said Rogan Kersh, a political science professor at Syracuse University who follows health-care issues."
THE DEEPEST CUTS: The severity of America's health care crisis is seen most vividly in the extreme moves some states are making to deal with cuts in Medicaid funding. A few states have pushed through wholesale cuts in coverage; Tennessee is dropping more than 300,000 people from its Medicaid rolls, while Missouri is cutting off 90,000. Meanwhile, New Hampshire yesterday became the first state in the nation to make "the poorest of the poor – even families with no income at all – contribute to their coverage." (Oregon tried a similar strategy two years ago, charging $6 to $20 a month for poor adults in an optional program, and "enrollment dropped by half in less than a year, from 100,000 to 51,000.") A newspaper in New Hampshire called the proposal an 'infamous moment' in the state history "comparable to the time a state senator suggested homosexuals should be allowed to donate blood 'as long as they donated all of it.'" (See American Progress's state-by-state analysis of the Medicaid cuts.)
IMPROVING MEDICAID THE RIGHT WAY: Plenty of options exist to improve Medicaid's performance without cost shifting to states or reducing coverage for people in need. A report by the Kaiser Commission on Medicaid and the Uninsured reveals that all fifty states and the District of Columbia enacted some form of cost-containment measures in response to the rising cost of Medicaid in the past two years. American Progress has compiled some of the most progressive of these measures, like basic drug reimportation programs, multi-state prescription purchasing pools, and small business health insurance pools. Read about them in our issue brief on "Improving Medicaid's Performance."
Pay Cut Hits (Most Of) America Hard (4/12/05)
THE HEALTH CARE SQUEEZE: The economic squeeze is "especially intense on the 47% of the workforce whose employers don't directly provide their health insurance." A study by AARP showed wholesale prices for popular brand-name prescription drugs rose by an average 7.1 percent in 2004, "more than twice the general inflation rate." AARP CEO Bill Novelli "called the increases disappointing, particularly in the year after President Bush signed a sweeping overhaul of Medicare." Bush's plan, which AARP originally supported, "prohibits the government from negotiating drug prices on behalf of consumers."
Under the Radar (2/14/05)
HEALTH CARE – SOARING COSTS ARE COSTING COMPANIES: The chairman and chief executive of General Motors Corporation, the company that provides "health insurance for more people than any other private employer in the nation," has pointed a finger at rising health care costs to explain why "American manufacturers are losing their ability to compete in the global market place." Speaking in Chicago over the weekend, CEO G. Richard Wagoner Jr. provided extensive evidence of the effect that soaring medical bills were having on "his company's bottom line" and announced he is launching a campaign to entreat legislators to pay attention to a very serious problem that endangers both future generations and future economies. Wagoner is not only concerned for his company; the cost of health care is "ultimately threatening the viability of most U.S. firms." But as Sean McAlinden of the Center for Automotive Research stated, "GM is the canary in the coal mine for Medicare and everyone else."
PR Offensive (1/14/05)
What good is $250 billion in revenue if nobody loves you? Yesterday, Wal-Mart CEO Lee Scott launched a public relations campaign aimed to restore the company's tarnished image. He's begun lashing out at the company's critics, claiming Wal-Mart is the victim of a misinformation campaign. Displaying its trademark light touch, Wal-Mart placed 100 full-page advertisements in major newspapers laying out its side of the story. The advertisement declares, "everyone is entitled to their own opinions about our company, but they are not entitled to make up their own facts." But Wal-Mart presents an incomplete and dishonest account of how it treats its employees. Here's the straight story:
DENYING HEALTH CARE BENEFITS: Wal-Mart brags about the generous benefits package it extends to employees. But the company fails to mention that "only 40% of the company's one million U.S. employees are currently enrolled in its healthcare plan, leaving close to 600,000 of its employees acquiring health insurance elsewhere — or not at all." Part of the reason behind this embarrassingly low uninsured rate – the national rate for insured employees at other large companies is 66 percent – could be the obstacles Wal-Mart places in front of workers seeking access to the health care plan. In spite of an astounding 60 percent annual turnover rate for its employees, the waiting period for enrollment eligibility was increased to six months for full-time employees and two years for part-time employees. If part-time employees make it over this hurdle, they still cannot buy coverage for spouses or children. It's also a wonder why their employees would even want to sign up for the health insurance plan as Wal-Mart "shifts much of the health care costs onto employees."
Under the Radar (10/28/05)
WAL-MART – COMPANY OPPOSES HEALTH INSURANCE FOR WORKERS: Vice President Cheney's favorite company, Wal-Mart, is pulling out all the stops to block Proposition 72 on the California ballot, "a measure that will require employers to provide basic health insurance to workers." Besides spending $500,000 to aid opponents of the measure, AP reports that Wal-Mart is breaking a tradition of trying to stay out of politics by spending more than $2.4 million on California races this fall – "well beyond any previous sum the company has spent here in one year." Wal-Mart's big funding to block Proposition 72 came just one day after TV ads cited a study from a University of California research group estimating "California taxpayers spend $32 million a year providing health care to Wal-Mart workers."
Updated: February 9, 2006