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Rent Seeker Approves of Raising Their Competitor's Cost Structure

Whenever you read that some large company is embracing a policy that seems counter to their interest, look closely at their motivation. Consider today's news that the nation's largest private employer is backing a health insurance mandate. Why would they favor something that would seem to increase their costs?

Wal-Mart backs employer health insurance mandate

WASHINGTON (AP) -- Wal-Mart has embraced President Barack Obama's call for requiring all large employers to offer health insurance to their workers, adding momentum to the president's push for far-reaching changes to the nation's health care system.

Wal-Mart, the nation's largest private employer, announced its position in a letter to congressional and administration officials Tuesday. It was joined by a major labor union that sometimes has criticized Wal-Mart as stingy with employee benefits.

"We are for an employer mandate which is fair and broad in its coverage," the letter said.

Why would they want a mandate? Read on to find out:

Wal-Mart recently said that 94 percent of its employees now have insurance, either through the company or a family member.

The law would not affect them, so endorsing it is a cost free decision. But all those other retailers who don't offer health insurance will find their costs going up. Grocery store chains like SuperValu, Kroger, and Safeway, department stores like Target, big box stores like Home Depot and Lowes, electronic retailers like Best Buy will all find themselves with higher costs if the health insurance mandate becomes written into law. Wal-Mart is just begging the government to impose a mandate on them that will cost them nothing, but saddle their competitors with a huge new expense. I can't wait until Obama says it's for the children.

Think about that the next time you hear of General Electric backing new regulations like the Cap and Trade mess working through congress:

That's part of the reason why I think you saw a lot of businesses supporting this bill -- everybody from Starbucks to GE, because what business is looking for is clarity and certainty, and what this bill signals is that we're not going to keep on being a prisoner of the past, we're going to reach for the future. The country that is able to lead on clean energy is the country that ultimately is going to be able to compete effectively in the 21st century.

Reach for the future with a GE™ carbon scrubber. But hold on to your wallet.


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Comments (27)

"Grocery store chains like ... (Below threshold)

"Grocery store chains like SuperValu, Kroger, and Safeway ..."

Actually, Safeway, Inc. has put together a model program for promoting employee health and reducing overall healthcare costs for their employees:

As with most employers, Safeway's employees pay a portion of their own health care through premiums, co-pays and deductibles. The big difference between Safeway and most employers is that we have pronounced differences in premiums that reflect each covered member's behaviors. Our plan utilizes a provision in the 1996 Health Insurance Portability and Accountability Act that permits employers to differentiate premiums based on behaviors. Currently we are focused on tobacco usage, healthy weight, blood pressure and cholesterol levels.

Safeway's Healthy Measures program is completely voluntary and currently covers 74% of the insured nonunion work force. Employees are tested for the four measures cited above and receive premium discounts off a "base level" premium for each test they pass. Data is collected by outside parties and not shared with company management. If they pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families. Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.

This type of thing can be done by the private sector. It is massive government red tape that prevents more companies from doing it.

I wonder if there will be e... (Below threshold)

I wonder if there will be exceptions for major corporations whose employees receive their health benefits throug a workers union?

And employees of SuperValu,... (Below threshold)
Adrian Browne:

And employees of SuperValu, Kroger, Safeway, Target, Home Depot, Lowes, and Best Buy will all find themselves with healthcare.

And you'll find the prices ... (Below threshold)

And you'll find the prices at SuperValu, Kroger, Safeway, Target, Home Depot, Lowes and Best Buy will go up.

But WalMart prices will stay the same. Advantage, WalMart.

Because, as everyone knows,... (Below threshold)
Adriane Brownie:

Because, as everyone knows, not having employer-provided health insurance = dying in the gutter from a hangnail because no doctor or hospital will treat someone without employer-provided health insurance.

And prices will go up at th... (Below threshold)

And prices will go up at those stores Adrian, and revenue will go down, which in turn will lead to employment going down.

Unless they reduce employment costs first, by cutting wages, another benefit or staffing to avoid raising prices.

What will this mean to a non-union market like Oregon's Paul-Mart?
Paging Mr. Hooson...

Wal-Mart is just b... (Below threshold)
Wal-Mart is just begging the government to impose a mandate on them that will cost them nothing, but saddle their competitors with a huge new expense

Exactly how does one conclude that 94% of their employees having health coverage costs Wal-Mart nothing? Is Wal-Mart getting coverage for those employees for free?

If the other merchants are not competitive with Wal-Mart's prices with that additional expense, whose fault is that?

It's called "com-pe-ti-tion." Maybe you should look it up sometime.

if people can't/won't affor... (Below threshold)

if people can't/won't afford a health care insurance plan on their own now, i hope they don't think their company will offer them something different.

The very fact that employer... (Below threshold)

The very fact that employers, especially larger ones, offer insurance to their employees is part of the problem in higher higher costs of health care.

Think of it this way: many people who go to a hotel don't make their bed, have no problem wiping up spilled red wine with a white bath towel, don't wipe their feet when they go in the door, splash water all over the bathroom when showering, and engage in various and sundry other behaviors they would never do at home. Someone has to clean that crap up. And we wonder why a decent room is over $100 a night. It's because everyone shares the cost of the few who abuse the commodity.

It's the same with anything else one isn't paying for directly. Insurance is abused in much the same fashion. For many, their insurance is paid for by the employer. We go to the doctor and show them our insurance card and NEVER look at the bill. We don't care. We're not paying but a small inconsequential co-pay. What do we care if the doctor has exorbitant malpractice insurance premiums and has to charge more? Why should we care if the hospital charges our insurance extra to cover the cost of those who didn't pay their bill? Why should I try to change my diet to correct a health issue if my insurance pays for medication that will do it for me? I've talked to my doctor frankly and he tells me I'd be amazed at the people who have employer provided health insurance who will make an appointment with him every time they sneeze. It's wasted and abused. It's become a catchall for every financial ill that has befallen the whole industry.

If we had to shop for our own insurance we'd see real change. They'd be more accountable to us - the individual - not the big bargaining companies that tell them, "Hey, we have 30 female employees. Three might become pregnant during their employment. You can charge them all for maternity care even if they're not within the child bearing years."

Aren't collectives great!?

I guess that could happen a... (Below threshold)
Zelsdorf Ragshaft III:

I guess that could happen adrian, if like you, they were too stupid to go to the emergency room like those who cannot pay for health insurance already do. I am going to guess at your politics. Lets see. You lie like a rug and are as dumb as a brick. I know, you are a Democrat.

Mr.Browne, The unins... (Below threshold)

The uninsured go to the ER for any emergencies
needing attention.

Maggie,Don't confu... (Below threshold)


Don't confuse him with the facts. He's in full blown liberal hysteria, and there's nothing anyone can do for him.

Just curious: Where will th... (Below threshold)

Just curious: Where will the Canadians go for healthcare when the US adopts a Canadian-style healthcare program?

Great Medical Advice fro... (Below threshold)
Adrian Browne:

Great Medical Advice from the desk of Dr. Maggie~

"Wait until it becomes an emergency."

Great Medical Advice fro... (Below threshold)

Great Medical Advice from the desk of Dr. Maggie~

"Wait until it becomes an emergency."

Jeez, Louise. You're the one who brought up "dying the gutter from a hangnail."
What are you proposing now? A public option plan for manicures?

Hello public plan ... dump ... (Below threshold)

Hello public plan ... dump all the costs.

Mr.Browne, I'm not a... (Below threshold)

I'm not a doctor, nor do I profess to be one
on tv. I have used the emergency services as
an uninsured citizen.
You have a problem with this?
In the UK, under socialized medicine the first
thing that disappeared was the world class
charity hospital system. The same thing will
happen here to the likes of such as St.Judes
and The Shiners Hospitals.
Now you can laugh funny man.

RE: #5 & 7What int... (Below threshold)
P. Bunyan:

RE: #5 & 7

What interesing arguments. Is this a new strategy? Now you acknowledge that universal health care already exists and that competition is actually a good thing...

Interesting. Very interesting. Which one of you came up with this? Markos? Dean? Carville?

Bunyan, wtf?Exactl... (Below threshold)

Bunyan, wtf?

Exactly what part of my statement addressed an idea of universal care at all?

I personally think that a few factors are at work, all in the wrong direction. I agree with Oyster that the expectation of "do-it-all" coverage as a mandatory benefit of employment has driven costs up significantly higher than if we'd stuck with the old-fashioned "major medical" shared risk model. I also think that the very last thing we need is a government mandate making that sort of plan required by law for every employer of any significance.

My beef with the post is the insinuation that somehow Wal-Mart was avoiding the cost of insuring its employees, and pushing for an unfair burden to be placed on its competitors.

My advice to you is to actually read what I write before you try to respond.

As to Adrian's comments, I actually concur to some degree. Much of the hysteria generated by the leftists attempting to install a socialized system ignores the fact that it's already illegal to deny service to those unable to pay, painting a picture that people will go untreated if we don't accept the bitter pill of public healthcare.

The fact is (as illustrated with our neighbors to the north) that with socialized medicine, far more people go without, or with substandard, treatment than within our admittedly imperfect system.

I actually read his first statement as making a mockery of the perceived need for immediate government intervention.

Of course, I'm apparently not on the same level of reading comprehension as some others here...

Maggie et al, I think Mr. B... (Below threshold)

Maggie et al, I think Mr. Browne was being ironic.

Perhaps Mr. Browne can confirm, or show me up for an optimist.

The horrors of the Canadian... (Below threshold)
Adrian Browne:

The horrors of the Canadian health care system:


Jamie:Ex... (Below threshold)


Exactly how does one conclude that 94% of their employees having health coverage costs Wal-Mart nothing?

Most everyone else appears capable of understanding this... but since aren't. The mandate would not change Wal-Mart's costs but would change it's competitors costs; thus, Wal-Mart benefits if the law is passed.

Jamie,I'm sorry if... (Below threshold)
P. Bunyan:


I'm sorry if I incorrectly identified you as a leftist, but you comment was so ass backwards it sounded like something a leftist would say.

I try to spell it out for you: If Obama's fascists policies become law it will place a burden on Walmart's competitor's that will not be placed on Walmart. Competition is great, but only on a level playing field. Obama will force that field to be tilted in Walmart's favor so of course Walmart would support that. That was the point of the origional post.

"I'm apparently not on the same level of reading comprehension as some others here"

That is correct.

Mike & Bunyan:Agai... (Below threshold)

Mike & Bunyan:

Again, let me emphasize that I'm not for the mandate whatsoever, and it's downfalls should be argued loudly, frequently, and most of all, accurately.

The reason that it wouldn't change Wal-Mart's costs is that Wal-Mart is pretty much already in compliance voluntarily. "Change," though, is the key word. The original post, and your comments as well, make it sound as though Wal-Mart is somehow escaping the costs.

You can not argue that the mandate will make the other companies noncompetitive when Wal-Mart has already accepted these costs voluntarily and IS competitive. There are numerous problems with the idea of government-mandated care for private sector employees, but giving an unfair advantage to Wal-Mart isn't one of them.

Instead, focus on the inevitable cost increases as competition among the insurance companies becomes nonexistent; focus on the costs in unemployment as the government levees more and more financial burden on employers for every warm body they hire; focus on the additional increases that are certain for those of us who purchase our own health insurance, rather than going through our employer. Pick any of dozens of points, but make the argument sound.

Fighting for the right thing in the wrong way is worse than directly supporting the wrong thing.

Damn Wal-Mart for endorsing... (Below threshold)

Damn Wal-Mart for endorsing this immoral plan. Sam Walton must be turning over in his grave.

Tom, Mr.Browne is n... (Below threshold)

Mr.Browne is never ironic, sarcastic maybe,
but never ironic. He is often though moronic.

Well, I gotta hand it to yo... (Below threshold)
Les Nessman:

Well, I gotta hand it to you Jamie. That is some industrial-strength obtuse you got going there. No one is saying Wal-mart's competitors will be NON competitive. We're just saying that many will be LESS competitive than they are now.

(Wal-mart pays bennies now. New law passes. Wal-mart pays bennies tomorrow. No new expenses for Wal-mart.

W-m competitor does not pay bennies now. New law passes. W-m competitor pays bennies tomorrow. New expense for W-m competitor.

Advantage Wal-mart.)

Is it really that hard to understand?






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