Wal-Mart Cost-Cutting Finds Big Target in Health Benefits

The Wall Street Journal ^ | September 30, 2003 12:08 a.m. | BERNARD WYSOCKI JR. and ANN ZIMMERMAN

[jjm2111]

BENTONVILLE, Ark. -- Wal-Mart Stores Inc. is famous for cutting costs everywhere it can. Today a giant target for the world's biggest retailer is the health-care costs of its employees.

Wal-Mart makes new hourly workers wait six months to sign up for its benefits plan and doesn't cover retirees at all. Its deductibles range as high as $1,000, triple the norm. It refuses to pay for flu shots, eye exams, child vaccinations, chiropractic services and numerous other treatments allowed by many other companies. In many cases, it won't pay for treatment of pre-existing conditions in the first year of coverage.

[goodnesswins]

Maybe soon, businesses will just start giving their employees $10,000 a year to buy their own insurance....you can get really good catastrophic insurance, and use the rest to pay for the incidentals, I would think. (I'm hoping for this cause I'm tired of paying for some others health habits.)

[LandofLincoln]

The BILLIONAIRES need to save more money. The Waltons are five of the ten riches people America. We should stop shopping there, I don't. Every American wants low priced goods, and high paying jobs. Well, you cannot have both.

[Hodar]

Benefits are 'gifts', not entitlements. Companies provide these benefits as a way to entice and keep employees. If the benefits at Walmart aren't good enough, you are free to explore other companies who offer better pay, benefits, vacations or other perks.

If this remains unchecked (as it should), either the best employees at Walmart will flock to the competition and Walmart will be forced to improve the benefits, or the competition will lower their benefits to be competitive. It's called capitolism.

[discostu]

Still seems pretty generous. When I was at McHell the only hourly employees that got ANY benefits package were the shift managers, everybody else was on their own.

[Corin Stormhands]

The BILLIONAIRES need to save more money. The Waltons are five of the ten riches people America. We should stop shopping there, I don't.

Governor Dean? Is that you? You wish the Waltons would redistribute their wealth?

My wife works part-time at Wal-Mart (she also teaches in a private academy). Wal-Mart, and their low prices have been good to the Stormhands family.

[SierraWasp]

"When I was at McHell"

Hay! Purdy gud!! I assume yew mean Mickey D's!!!

[jjm2111]

Large companies like Walmart that drive enconomies of scale when it comes to price of course can drive economies of scale when it comes to the cost of their employees.

I think the two ways to get people high-quality reasonable-cost medicine is to limit malpractice lawsuits and reduce taxes. If people paid say close to 10% of their total income in taxes as opposed to the 40-50% they currently pay, quality medical care would surely be affordable.

I do believe that gov't can step in to cover people for catastophic illnesses or injury and to cover the very poor. I would hedge this however because with programs like Medicaid more and more money is spent for less and less. Gov't is surely the way to do it wrong.

[Digger]

Why should any company have to address this issue. Why not give them a 10,000 raise & let them do what they want with it & forget any benefits. It is the individuals responsibility. Since when does a company have to direct an individual to buy health care. I know where it started - when Nixon instituted wage & price controls & this became a way for companies to get around raises. Another dumb move by the so-called conservative party leader, not to mention centralizing government, taking us completely off of the gold standard & moving into an apartment owned by Rockefeller when leaving office ( for being a useful idiot to the NWO). What watergate was appears to be scanty compared to these other actions - that is if you are truly conservative.

[livius]

Seems pretty good to me, too. And if people who work there aren't happy with the basic plan, they evidently have the option to pay a little more and upgrade.

Personally, I think a basic plan with a relatively high deductible but good catastrophic coverage is the way to keep medical costs down. (It's what I have, and I'm self-employed and pay for it 100% myself.) I don't see why people can't pay for their own contraceptives, stomach stapling, etc.

[discostu]

If you were on the inside you'd know it as hell. Well I suppose I should change to McPurgatory since it turned out to be a temporary hell.

[Timesink]

They buried the lead:

Wal-Mart offers other plans with higher premiums and deductibles as low as $350. About 90% of retailers and of U.S. employers overall have deductibles of $310 or less, according to Watson Wyatt.

[CA Conservative]

I agree with you. How did we get to the point where we view medical insurance as a right? The ability to obtain medical care, i.e. to not be discriminate against, that is a right, but there is no right to force others to pay for a certain level of care.

As a conservative, I agree with Walmart's right to use this method of controlling costs. If the employees don't like it, they are free to find another employer. That is the free market. I don't agree with trying to force Walmart to provide certain benefits, either through lawsuits or union thugs...

[Doctor Stochastic]

How does $13 every two weeks become $200 per month?

[goodnesswins]

I agree with EVERYTHING you say....EXCEPT.....don't make it a "10,000 raise".....they will TAX that.....it should be an untaxable BENEFIT!!!

[af_vet_1981]

How prevalent was health insurance 40 years ago and what part has it played in the life expectancy rates ?

[sixmil]

Benefits are 'gifts', not entitlements. Companies provide these benefits as a way to entice and keep employees. If the benefits at Walmart aren't good enough, you are free to explore other companies who offer better pay, benefits, vacations or other perks.

If this remains unchecked (as it should), either the best employees at Walmart will flock to the competition and Walmart will be forced to improve the benefits, or the competition will lower their benefits to be competitive. It's called capitolism.

Exactly. The only reason that companies used to do pensions and health plans is because it was an employees market, instead of an employers market as it is now. It's also ridiculous to go to the doctor and have a 5 dollar bill for the visit. I'll gladly pay for insurance, but not a maintenance plan.

[txzman]

Get ready. Coupled with the news that 2.4 million more lost health insurance, there is a growing popular wave for nationalized healthcare. It's coming - the only question is when and in what form.

Just keep saying: Greed is good. Perhaps if some of the $180 million CEO salaries went for healthcare programs, companies would not be in this bind.

[oceanview]

exactly right. once we have a health care system that is only available to the elderly (medicare), government workers with a health plan, and the poor (medicaid), the game is up. At that point, enough people will vote for a universally funded plan that covers everyone, basically extend medicare to cover everyone.

[LandofLincoln]

No Corin, I am not Dean. But, let me tell you (not to rub it in your face) I work, my wife does not, she is a home maker. You work? You did not say, but you did say that your wife works at Walmart part-time, after her full time job. Maybe that is why it does not bother you that Walmart is now going to change employee benefit policies. What about the person who does not have another job?

I own my own business with eight employees, they have great benefits, and I treat them very well. Because I know how important they are to the bottom line. Maybe if I had 10,000 employees I could be less sensitive. Truthfully, it is probably best that employers not pay any benefits. I would rather give you your pay and tell you to provide yourself with whatever your needs are. Then you could cry to the USG and they can tax you in exchange for your health needs. That is where it is going anyway. A bunch of people SCREAMING for the USG to subsidize them. Not you and your wife, you BOTH have THREE jobs.