The New York Times breaks the story this morning of changes in Wal-Mart's health care plan for its employees:
Wal-Mart, which has long been criticized for the benefits it offers to its workers, is introducing a cheaper health insurance plan, with monthly premiums as low as $11, that the company hopes will greatly increase the number of its employees who can afford coverage.The problem is (and you knew there was going to be a problem, didn't you?) that just like the old health insurance plan, the new plan has a $1000 deductible:
Those who participate will pay a $1,000 deductible, the maximum under Wal-Mart's insurance for 2005. Monthly premiums will be, on average, less than $25 for an individual, $37 for a single parent and $65 for a family. The $11 premium, for individuals, will be available in a handful of areas, Mr. Fogleman said. But the plan is unlikely to cover a complicated illness or expensive hospital stay during the first year, when there is a $25,000 insurance cap. (The cap is lifted for the second year.) Out-of-pocket payments range from $300 for prescriptions to $1,000 for hospital stays.The exact details of the plan haven't been released yet, but do a little reading between the lines of the NYT story and you can tell they won't be pretty:
But analysts cautioned that the new insurance plan would prove a better fit for workers who are young and healthy than those who are older and more vulnerable to illness. A 60-year-old Wal-Mart employee, they noted, might visit a doctor three times in a one month and then need to pay $1,000 before the company would share the cost of care. Given that many Wal-Mart employees are paid less than $19,000 a year, the deductible "is pretty significant," said Charles N. Kahn, president of the Federation of American Hospitals. [emphasis added]This paragraph makes an obvious point: a $1000 deductible is huge for workers who, on average, make less than $20,000/year. It doesn't mention that under the old plan it took at least six months to qualify for health benefits at Wal-Mart and since Wal-Mart has a 45% turnover rate, many workers won't make it even that long. But check out what I highlighted above. Even after a Wal-Mart employee throws in $1000, the company still only shares the cost of care. This health plan sounds like a sick joke. Or perhaps a P.R. move in response to pressure. "No," says Wal-Mart:
Asked if the new insurance plan was in response to growing criticism, [Wal-Mart spokesman Dan Fogelman] said, "It's fair to say we are listening, but more so to our associates than anyone else."Dan, I guarantee you, this wasn't what they wanted. This is just typical Wal-Mart: lower the price for a poor-quality product. But health care isn't just another piece of cheap plastic crap, and Wal-Mart's employees are smart enough to know the difference.