Wal-Mart Breaks Ranks To Support Obama Bid For Employers To Provide Health Insurance

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Main Category: Health Insurance / Medical Insurance
Article Date: 01 Jul 2009 - 8:00 PDT

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Wal-Mart Stores Inc has stunned other big employers by revealing it had broken ranks to openly support the White House plan to mandate employers to provide health insurance to employees; the central plank of President Barack Obama's proposal to increase coverage to include Americans.

A report in today's Wall Street Journal (WSJ) suggests the move could give just the right impetus to the controversial legislation that is currently in front of Congress, whereby in order to extend cover to 46 million Americans who currently have no health insurance, employers will be required by law to provide health insurance cover for their employees, or at least help them pay for it. Small businesses would either be exempt or have to pay less.

Until now, major employers have spoken against the proposals, arguing that it will increase costs and lead to job cuts and lower wages, and may even cause companies to go bust.

Wal-Mart already provides insurance to its workers, but is keen to see others have to do the same. The company broke ranks with its peers and delivered a letter to the White House earlier today signed by its Chief Executive Mike Duke that described support for "an employer mandate which is fair and broad in its coverage", reported the New York Times.

Duke wrote in the letter that:

"Not every business can make the same contribution, but everyone must make some contribution."

The letter was also signed by Andrew W Stern, president of the Service Employees International Union, and John D Podesta, who led President Obama's transition team the presidency and is chief executive of the Center for American Progress, a Democratic policy organization and think tank.

Wal-Mart's revelation has "flabbergasted" the National Retail Federation. Their Vice President, Neil Trautwein said they were one of the biggest opponents of the employer mandate (a law that forces employers to provide or support worker health insurance).

He told the WSJ that he and his colleagues at the Federation were "surprised and disappointed" by Wal-Mart's decision to "embrace an employer mandate in exchange for a promise of cost savings".

He said this legislation would "quite possibly cut off the economic recovery we all desperately need".

James Gelfand, senior manager of health policy for the US Chamber of Commerce agreed. He told the WSJ said that most of their 3 million member businesses were against an employer mandate. He doesn't think that Wal-Mart's move will affect their view, because the kind of policy described in the letter that Wal-Mart has signed is the "worst incarnation, the most dangerous policy".

Over 50 per cent of Wal-Mart's 1.4 million US employees are already covered by health insurance provided by the company, but to come out in support of an employer mandate is being described as a considerable shift in stance on the part of one of America's largest employers.

For years the company has been fighting to keep out unions, who are in support of the employer mandate. Yet two years ago it joined with one of America's largest unions in voicing support for the idea that all Americans should have affordable healthcare, which should be made possible by extending cover to the uninsured and lowering costs of health care.

Sources: Wall Street Journal, New York Times.

Written by: Catharine Paddock, PhD
Copyright: Medical News Today
Not to be reproduced without permission of Medical News Today