HealthLawProf Blog

Editor: Katharine Van Tassel
Akron Univ. School of Law

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Saturday, October 29, 2005

Walmart and Health Care Costs

The New York Times has a terrific piece on Walmart's health care woes.  Walmart's concerns about the high price of providing health care may encourage Congress to reform our health care system (or at least we can hope so).

As the nation's largest employer, Wal-Mart cannot help but be entangled in the increasingly contentious debate over how best to provide health care to working Americans. Many of the company's 1.3 million employees are drawn from the most vulnerable part of the national labor pool: people who can find only low-paying jobs, who frequently cannot afford health coverage and who have no ability to absorb the kind of bank-breaking inflation in medical costs the country has experienced since the late 1990's.

For various social and economic reasons - including limited access to preventive medical care - low-income workers and their families often have the greatest health care needs, with the least ability to meet them. The Wal-Mart quandary involves a fundamental national issue: Who, if anyone, should provide care to the bulk of Americans.

"Whose responsibility is this?" said Carolyn Watts, a health professor at the University of Washington. "Is it the government's responsibility or the employer's?"

As health care costs continue to soar well above the general rate of inflation, Professor Watts says the United States can no longer rely on employers to provide widespread coverage and needs to grapple with that new reality. "It's a very different social contract than we have had," she said.

The controversy over Wal-Mart's benefits may mask what some experts see as an unraveling of the employer-based system of health coverage. "These are indications of the gaps in the health care system that are exposed by Wal-Mart," said Len Nichols, a health economist at the New America Foundation, an independent public policy group in Washington. "You can't blame Wal-Mart."

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