Employers and Health Care Costs

Given the rising costs of health care in our country, employers have great incentive to avoid offering health care benefits to their workers to the greatest degree possible. An example of this is seen in an article in today's NY Times, detailing an internal memo to Wal-Mart's board of directors laying out strategies whereby Wal-Mart can avoid paying for an ever larger degree of it's worker's health care:

"An internal memo sent to Wal-Mart's board of directors proposes numerous ways to hold down spending on health care and other benefits while seeking to minimize damage to the retailer's reputation. Among the recommendations are hiring more part-time workers and discouraging unhealthy people from working at Wal-Mart.

In the memorandum, M. Susan Chambers, Wal-Mart's executive vice president for benefits, also recommends reducing 401(k) contributions and wooing younger, and presumably healthier, workers by offering education benefits. The memo voices concern that workers with seven years' seniority earn more than workers with one year's seniority, but are no more productive."

As aluded to in the memo, Wal-Mart already suffers from the (deserved) reputation that it deliberately avoids paying for it's employees health care to the greatest extent possible, and is content to pass most of the costs off to the state:

"The memo acknowledged that Wal-Mart, the world's largest retailer, had to walk a fine line in restraining benefit costs because critics had attacked it for being stingy on wages and health coverage. Ms. Chambers acknowledged that 46 percent of the children of Wal-Mart's 1.33 million United States employees were uninsured or on Medicaid."

Unfortunately for Wal-Mart, the escape of the memo to the public undermines the company's very purpose of trying to diminish it's tarnished reputation. But Wal-Mart is really only guilty of getting caught putting on paper what most other companies in America are thinking. The cost of health care is steadily rising, meaning the companies that elect to provide some health benefit to their employees are paying more and more to provide the same level of coverage, or cutting back their coverage to keep from having to pay more. As a result all companies have the very incentive Wal-Mart does here, to avoid taking on sick or disabled workers in the first place. As a result, not only are less helathy working adults unable to obtain health care through their jobs...but at Wal-Mart at least, their unable to obtain jobs in the first place.

Health care in this country, as it's structured, gives companies every incentive to look for employees who don't require health benefits or will work without them. This basic fact will not change until health care in some form or fashion is universally available to all Americans, regardless of their employment status. Again, it's another example of a system that's slowly crashing down around our ears.