Wal-Mart's Health Care Crisis: Eliminating Plans, Raising Premiums, and Shifting Costs

Strategic Insights -

WakeUpWalMart.com revealed internal documents showing that Wal-Mart is worsening its health care benefits, contrary to the company's public claims. The 2007 Wal-Mart Medical Benefits Booklet details plans to eliminate health care options, increase medical premiums, and introduce a "spousal surcharge" to deter spouses from being insured. This move will disproportionately affect the 1.39 million employees and their families, making it even harder for them to access affordable health care.

Key Takeaways:

  • Wal-Mart will eliminate the Network Saver plans and the standard plans for new hires, replacing them with a catastrophic health care plan with multiple high deductibles, known as the "Value Plan".
  • The Value Plan includes a $300 pharmacy deductible, a $1,000 in-patient deductible per visit, and a maximum out-of-pocket expense of $5,000 for an individual per year.
  • Wal-Mart is increasing premium costs by 8.3 percent for the Network Saver Plan, 7.6 percent for the Standard Plan, and 6.9 percent for the Freedom Plan.
  • A "spousal surcharge" of $1,800 per year will be introduced to deter spouses from being insured by Wal-Mart.
  • In 2006, Wal-Mart failed to provide company health care to over 750,000 hard-working families, or 54 percent of Wal-Mart employees and their families, at a cost to American taxpayers of at least $1.39 billion annually.
  • Wal-Mart's refusal to provide affordable health care to its employees has led to 46 percent of their children being uninsured or on public health care assistance, with American taxpayers paying an estimated $1.39 billion in 2005 and up to $9.1 billion over the next 5 years to subsidize the health care costs of Wal-Mart workers.

Statistics:

  • 1.39 million: Number of Wal-Mart employees and their families affected by the health care crisis.
  • 54 percent: Proportion of Wal-Mart employees and their families who were denied company health care in 2006.
  • $1.39 billion: Cost to American taxpayers of subsidizing the health care costs of Wal-Mart workers in 2005.
  • $9.1 billion: Estimated cost to taxpayers over the next 5 years to subsidize Wal-Mart workers' health care costs.
  • 46 percent: Proportion of Wal-Mart workers' children who are either uninsured or on public health care assistance.
  • $11 billion: Wal-Mart's annual profit in 2006.
  • 30 percent: Proportion of a typical full-time Wal-Mart worker's income that will go towards health care costs under the Value Plan.
  • 60 percent: Proportion of a Wal-Mart worker's income that will go towards health care costs if they enroll their family under the Value Plan.

Sources:

  • WakeUpWalMart.com
  • U.S. Newswire, "Wal-Mart's Health Care Crisis: Documents Reveal Worsening Benefits", September 26, 2006.
  • "America Pays, Wal-Mart Saves", report by WakeUpWalMart.com, available on WakeUpWalMart.com's website.