Continuing Confusion on Companies and Affordable Care: Walmart Example

walmartNew Orleans            Reading continuing reports on the number of people seeking coverage directly in the marketplace or through their employers under the Affordable Care Act makes it clear in many fundamental ways, people still don’t get some of the dimensions of the healthcare contradictions.  Nothing made the case for this argument more conclusively than a column in “The Upshot” in the Times about more Walmart workers signing up for the company’s plan.

In an earnings call, Walmart announced that there had been a significant increase in the number of its workers who signed up for health insurance. Given that it is the nation’s largest private sector employer with over a million workers, we would hope that’s a good thing. They were warning stockholders because the increased participation would tally about a half-billion in additional costs.

What does that really mean?

Well, if they are paying a bargain price of $2500 per year, a tad over $200 per month for employee-only coverage, then perhaps 200,000 workers signed up for the company’s coverage due to the individual mandate. Of the 1.3 million workers Walmart says that it employs in the US that would mean an additional 15% of the company’s workforce enrolled, and let’s keep calling that good news.

What is left unsaid is what the percentage of participation might have been before the mandate began coming into play requiring coverage. My experience organizing Walmart workers would have held that participation earlier could not have even been 15%, so perhaps with this self-reported “surge” of enrollment in the company plan, the total participation is now 30% of the workforce or 400,000 of the 1.3 million workers. Hey, let’s be liberals, which we are not, and say that a quarter of the workforce previously had been on the plan and the numbers are now up to 40% or a bit more than 520,000 workers. We’re searching for real progress here, remember?

Any way you slice it, almost 800,000 are NOT covered by the company’s plan. Some, as we know, make so little money that they would be covered under state and federal programs that were income qualified, saving the company money and transferring the costs to the government. In this discussion we’re OK with that if it means that the workers have healthcare. No way to know how many workers that might be though. Another 200,000? Maybe even 400,000? Either way, a lot of workers will still have nada.

Meanwhile, here’s the hurting thing. Walmart is clear that the increased enrollment did NOT “come because of a more generous company policy.” Gulp, the old policy pretty much sucked, and the old boss here is the new boss still, meaning workers have a relatively low, qualifying monthly premium under 8.5% of their gross income, and relatively high deductible and general coverage plan.

These other 400 or 500,000 workers are likely “stuck like Chuck,” trying to figure out a way to get other coverage or pay the fine for not having any, and since Walmart offers this no-frills health plan, they are also barred from getting any subsidies from the federal or state marketplaces and any cost sharing.

Only in a country where something is better than nothing, is any of this report really within a mile of being good news.

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