Health care for Wal-Mart

Big government strikes again! It seems the Maryland legislature is set to pass legislation—and, it seems, veto-proof legislation—that “would effectively require Wal-Mart to boost spending on health care.” On the surface, this seems wholly unobjectionable. The amount of money being discussed here, some $8 million, is relative peanuts for a company with $288.2 billion in sales last year. In fact, Wal-Mart just shelled out $11 million as a fine last month for employing undocumented workers. So set aside those claims that the days of “Always Low Prices” are now over.

On a related note, though, I may as well link to a BusinessWeek story I read a few months back. Critics have long charged that Wal-Mart places a burden on state budgets because so many of its employees lack health insurance and end up on Medicaid. This always seemed like a weak attack to me—Medicaid coverage is often cheaper for states, less erratic, and less regressive than some forms of subsidized employer-based health care—but hey, what can you do. At any rate, to placate its rather angry foes, Wal-Mart released an internal study claiming that 86 percent of its employees have medical insurance. Of course, the type of insurance matters a great deal here, which was part of my point about Medicaid. As a recent study on the topic pointed out, many workers hit hard or bankrupt by medical emergencies already had insurance when disaster struck. Their policies, however, were inadequate to cover costs—a reminder that simply forcing companies to increase their coverage isn’t always a solution to the larger health care problem facing the United States.