Wednesday, July 01, 2009

Wal-Mart Now in Favor of Company-Mandated Healthcare

The headline on today's WSJ is Wal-Mart Backs Drive to Make Companies Pay for Health Coverage. "We are for an employer mandate which is fair and broad in its coverage," said Wal-Mart Chief Executive Mike Duke in a letter to President Obama. Why?
About 52% of Wal-Mart's 1.4 million U.S. employees are covered by company-provided insurance, up from 46.2% three years ago. The retail industry average is 45%, according to a Kaiser Family Foundation 2008 study.

Wal-Mart isn't changing its policies. The company says it supports the employer mandate because all businesses should share the burden of fixing the health-care system. Wal-Mart also said the mandate will only work if it is accompanied by a government commitment to rein in health-care costs that is guaranteed.
This is nothing more than an attempt to put out of business all of the smaller retail firms trying to compete against Wal-Mart. It will also force many other businesses that supply Wal-Mart products either out of business or to raise prices. The firms that build its buildings, handle its leases, clean it parking lots must raise their prices to cover this added cost.

Wal-Mart says everyone must share the burden of fixing the health-care system. I am not sure it is broken. It is more expensive for the average user but what he is getting is the best in the world, and it improves every year. Quality health care is a luxury -- an income-elastic expense. Of the 45 million that don't have it, many don't need it or want to pay for it; e.g., the young and/or single. Do we destroy it all because 15 percent don't have health care?

Neil Trautwein, vice president with the Washington-based trade group National Retail Federation (retail industry lobby) said
an employer mandate is "the single most destructive thing you could do to the health-care system shy of a single-payer system," under which the government handles health-care administration. The mandate "would quite possibly cut off the economic recovery we all desperately need."
Wal-Mart is looking out for itself -- a lesser of two evils -- avoiding the national system but embracing a employer-mandate health care pay system that will eliminate a great deal of its competition.

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