Wal-Mart, Target to offer workers unaffordable healthcare

When I signed on with some temp agencies after a pretty serious financial setback, I found that they all offered insurance-- which the people working there often whispered I shouldn't sign up for, since it would take a huge chunk of my earnings and provide minimal coverage with large deductables. No surprise there. Their raison d'etre is injecting themselves into the employment process and skimming money from struggling workers. Wal-Mart and Target, on the other hand, are America's largest retailers, and very profitable besides. I think three of the Waltons were among Forbes' ten richest Americans, or at least the top twenty. And as my Republican friends might say, you don't get those inherited... errr, I mean hard-earned billions by being Mr. Nice Capitalist.

Wake Up Wal-Mart reports:

Among the most striking findings outlined in Wal-Mart’s 2007 benefits booklet is the substantial health care cost a low-paid Wal-Mart worker would be forced to pay under the so-called ‘Value’ plan. A typical individual Wal-Mart worker who enrolls in the Value Plan will face high upfront costs because of a series of high deductibles, including a minimum $1,000 deductible for individual coverage, a $1,000 in-patient deductible per visit, a $500 out-patient surgical deductible per visit, a $300 pharmacy deductible, and a maximum out of pocket expense of $5,000 for an individual per year.

In total, when factoring the maximum out-of-pocket expense and the cost of the yearly premium ($598 a year for an individual under the Value Plan), a typical full-time worker (defined by Wal-Mart as 34 hours) who earns 10.11 an hour or $17,874 a year, would have pay nearly 30 percent of their total income for health care costs alone.

Incredibly, the health care cost burden actually worsens should an uninsured Wal-Mart worker enroll their family under the Value Plan. Again, because of multiple deductibles for each family member, and when factoring in the cost of the medical premium ($780) and maximum out-of-pocket expense ($10,000), a Wal-Mart worker whose family is insured under the “Value Plan” could pay as much as 60 percent of their total income towards health care costs under Wal-Mart’s most “affordable “health care” plan.

The Prospect's Ezra Klein adds:

More worrisome, though, is that Target has promised the same move, which will mean that the two largest retailers will both eschew traditional health care plans for low-cost (to the company), high-risk (to the employee), astonishingly stingy offerings. Now, of course, any retailers who seek to compete with them -- and that includes supermarkets, clothing outlets, and all the rest -- will be at a competitive disadvantage if they fund traditional health care plans for their employees. It also means producers will be under added pressure by Wal-Mart and Target to make the same shift in order to lower their labor costs and, thus, prices. If the producers refuse, Wal-Mart can simply replace them with their in-house brands. This is how a race to the bottom starts. This is how employer-based health security dies.

New maxim: A rising tide leaves plenty to drown.