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Wal-Mart Foes Push Legislation: Group Says Retail Giant Costs State $30 Million in Medicaid

Posted on: Wednesday, 1 March 2006, 06:00 CST

By Julie Forster, Pioneer Press, St. Paul, Minn.

Mar. 1--Launching this year's campaign to pressure Wal-Mart Stores to provide better health care to its workers, a union-backed group charges the health care picture is getting worse as the nation's largest private employer continues to add stores.

Wake Up Mal-Mart, a group backed by the United Food and Commercial Workers, is pushing legislation across the country to set a spending threshold on large companies for employee health care coverage. In Minnesota, legislators in both chambers are working on their own versions, but the effort has been given little chance of success.

The bills are modeled on legislation that Maryland passed into law over its governor's veto -- a law that is now under a legal challenge by a retailers group.

In Minnesota, the annual Medicaid tab for Wal-Mart workers and their children amounts to $30 million, Wake Up Wal-Mart estimates, using figures released by a handful of other states as a guide. The retailer employs about 19,000 people in Minnesota.

Wal-Mart, meanwhile, maintains it creates thousands of jobs every year and saves consumers billions of dollars. It said last week it was expanding its health plans.

In launching its campaign, Wake Up Wal-Mart lined up 17 current and former Wal-Mart workers in 14 states, including Minnesota, to speak out this week and next about the company's health care practices. The main message is that Wal-Mart workers are dominating publicly subsidized health care programs. At a news conference Tuesday in St. Paul, legislators and advocates representing low-income workers called on Wal-Mart to stop exploiting state taxpayers.

The group estimates American taxpayers spent nearly $1.4 billion in 2005 to subsidize Wal-Mart's health care costs alone. "In terms of pay and benefits, the Wal-Mart business model is leading this race to the bottom," said Chris Kofinis, a Wake Up Wal-Mart spokesman. "Unfortunately, other companies are following it."

Dana Rezaie, 51, who has worked as a stocker at a Wal-Mart in Fridley for five years, said she receives insurance for herself and three children through MinnesotaCare, a state subsidized health care program.

On her $11.29 per hour pay, she says she couldn't afford Wal-Mart's $300 monthly premiums for family coverage and deductibles reaching over $1,000. She hears the same from other workers but no one else was willing to step forward. "I'm tired of having everyone complain, complain, complain and no one doing anything," she said.

Wake Up Wal-Mart claims that an average of 13 percent of Wal-Mart's work force is on public health care assistance, compared with the national average of 4 percent for all employers.

A Wal-Mart spokesman waved off the group's effort as "a political stunt and based on phony numbers."

The retailer would not disclose how many of its workers are on public assistance but spokesman Kevin Thornton said the percentage is lower than the retail industry average. Seven percent of the employees who come to work for Wal-Mart are on Medicaid, Thornton said. That number drops to 3 percent within two years. "Our jobs give people the opportunity to move from public health care programs to private health coverage," he said.

Wal-Mart's expanded health plans include broadening an option for $11 per month for individual health insurance and significantly reduced the waiting period for part-time associates to become eligible for company health coverage.

Julie Forster can be reached at jforster@pioneerpress.com or 651-228-5189.

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Copyright (c) 2006, Pioneer Press, St. Paul, Minn.

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Source: Saint Paul Pioneer Press (St. Paul, Minn.)

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