Wal-Mart’s Catastrophic Health Plan

Wal-Mart corporate issued a press release about a month ago, touting its “first-of-its-kind” program that will offer its employees free health coverage for such catastrophic expenses as heart, spine and transplant services using 6 “Centers of Excellence.” Patients must be healthy enough to travel for the surgeries.

But that announcement seems trivial compared to the story which came out today saying that Wal-Mart’s basic health plan premiums were going to rise by as much as 36%, with employees paying a minimum of $1,750 in deductibles, plus the monthly premiums, before Wal-Mart pays for a penny of their care. 

What Wal-Mart has done is move towards higher and higher deductibles, and more and more benefits back-loaded on the catastrophic side. The fact is, the vast majority of Wal-Mart’s 1.4 million U.S. employees will never need heart or spinal surgery, much less transplant surgery. By making a lot of noise about these little-used benefits, Wal-Mart seeks to deflect attention away from the expensive front-end costs of these plans to its workers, which results in nearly half of them not buying the company plan. 

According to the Reuters story on Wal-Mart’s health plans, employees interviewed said they would be forced to drop the company’s health plan when the premiums rise. "I really can't even afford it now,” one employee told Reuters, ”so for it to go up even a dollar for me is a stretch,"

A Wal-Mart employer, who is also a member of OUR Wal-Mart, a group that has been encouraging workers to stand up against the retailer, told me this week that she doesn’t buy the company’s health plan because “the deductible is so high.” Many of these workers can get a better deal by signing up for Medicaid, the state/federal health plan for poor people. In a number of state studies of the Medicaid rolls, Wal-Mart employees and their dependents rank #1 in the private employee’s use of taxpayer-supported health care.

To cover only the very catastrophic expenses, Wal-Mart cut contracts with six health providers: the Cleveland Clinic in Cleveland, Ohio; Geisinger Medical Center in Danville, Pa.; Mayo Clinic sites in Rochester, Minn., Scottsdale/Phoenix, Ariz., and Jacksonville, Fla.; Mercy Hospital Springfield in Springfield, Mo; Scott & White Memorial Hospital in Temple, Texas; and Virginia Mason Medical Center in Seattle, Wash. 

“We have identified six renowned health care systems that meet the highest quality standards for heart, spine and transplant surgery,” a Wal-Mart spokesperson said. “Through these hospital systems, our associates will have no out-of-pocket expenses and a greater peace of mind knowing they are receiving exceptional care from a facility that specializes in the procedure they require. This is the first time a retailer has offered a comprehensive, nationwide program for heart, spine and transplant surgery.” 

But almost half of Wal-Mart’s workers have no peace of mind at all when it comes to health care. They simply aren’t paid enough to buy health care where they work. 

What you can do: Wal-Mart told Reuters that all its full-time associates are offered the same plan as company executives—except it’s much easier for CEO Michael Duke to pay the deductibles and premiums than the starting worker making $8.90 per hour. It’s a nice sound bite for Wal-Mart, but ability to pay still separates the frontline worker from the store managers and top Executives. The focus on catastrophic coverage, while undermining the basic entry level preventive plans, shows just how upside-down Wal-Mart health plans have become.

Readers are urged to contact Wal-Mart Media relations at 1-800-331-0085 with the following message:

“I’m calling to urge Wal-Mart to perform some radical surgery on your wage scale, so that your employees can afford to buy basic health insurance without having to go on Medicaid. As it stands now, your employees won’t be getting free bypass surgery because they can’t afford the basic plan in first place. You need to take care of your workers before they need transplants or spinal surgery. Your high deductible plans discourage workers from having any health coverage from Wal-Mart, leaving the taxpayers to pick up the cost of your workers’ health.”  

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