Wal-Mart taking a good-guy stance
Whatever the company’s motive, retail behemoth Wal-Mart Stores Inc. made healthcare reform significantly more likely last week by throwing its weight behind a requirement that all employers provide health coverage.
The company made its position known in a letter to President Obama, who has said an employer mandate is vital to helping cover the roughly 46 million people in the United States who lack medical insurance.
Although it wasn’t in the letter, Wal-Mart also says it supports a mandate for all uninsured people to buy reasonably priced coverage -- another key element of the healthcare debate.
“It’s pretty clear that we’re advocating for reform,” Greg Rossiter, a company spokesman, told me. “We’ve said for some time that we support healthcare reform. It needs to be comprehensive and it needs to happen.”
If those remarks caused you to do a double take, you’re not alone.
This is Wal-Mart, right? The same company that’s drawn fire from unions and municipalities for not providing sufficient coverage to its own 1.4 million U.S. workers?
The same company that just a few years ago was fighting aggressively against similar proposals at the state level?
“Wal-Mart has been working hard to improve its image on healthcare,” said Paul Ginsburg, president of the Center for Studying Health System Change, a Washington think tank. “They’ve moved from being a bad guy to a good guy.”
That was the consensus among various healthcare experts I spoke with. While none could say for sure what Wal-Mart’s motive may be, there was general agreement that whatever the company is up to, its contribution to the reform debate is a positive one.
“This blows a hole in business opposition to reform efforts,” said Judy Feder, a Georgetown University public policy professor who also serves as a senior fellow at the Center for American Progress.
The center’s president, John Podesta, who helped lead Obama’s transition team after the election, joined Wal-Mart Chief Executive Mike Duke in submitting last week’s letter to the White House.
Also signing the letter was Andrew Stern, president of the Service Employees International Union, which has been at odds with Wal-Mart in the past but is aligned with the company on healthcare issues.
When I pressed Rossiter on the company’s motive for embracing healthcare mandates, he insisted that Wal-Mart has always recognized a need for overhauling the healthcare system.
The record, I believe, says otherwise. Until relatively recently, Wal-Mart has been viewed primarily as an opponent to reform, not an agent of change.
So what gives?
Many healthcare activists are reluctant to go on the record criticizing Wal-Mart for fear they’ll discourage the company from continuing down the reform path. But privately, they say it’s possible Wal-Mart is backing mandates as a way to head off more onerous legislation.
Specifically, the company may be trying to put the kibosh on a “free-rider provision” that would require employers to contribute to individual policies or government programs like Medicaid if workers have no other recourse for coverage.
About 52% of Wal-Mart employees are insured through the company, up from roughly 46% several years ago. The rest have to look elsewhere for coverage.
Often, coverage ends up being provided by taxpayers. As the nation’s largest employer, Wal-Mart would perhaps have the most to lose from a free-rider provision.
Another catalyst for the company’s born-again reform zeal could be a calculation that its size and income -- $13.4 billion in profit last year -- make it better positioned than rival retailers to withstand the financial burden of a mandate.
Observers made a similar case in trying to explain why Philip Morris broke from other tobacco companies to support regulation of its business by the Food and Drug Administration. Simply put, Philip Morris had less to lose from FDA oversight and more market share to protect.
Many large and medium-size retailers may find a healthcare mandate too great a challenge amid ever-narrowing profit margins. For Wal-Mart, the higher cost of insurance could be offset by an influx of new customers.
“It’s hard not to imagine that there’s a lot of self-interest here,” said Bob Greenstein, executive director of the Center on Budget and Policy Priorities.
Still, he and others are prepared to give Wal-Mart the benefit of the doubt on the company’s sincerity in its recognition that, as it says in the letter, “now is the time for action on this vital issue.”
No less intriguing, Wal-Mart apparently remains open to Obama’s proposal for a public insurance plan that would compete with private insurers.
“At some point, we’ll have something to say about it,” Rossiter said.
It’s strange to think of Wal-Mart as one of the good guys in the healthcare debate. But the company is to be commended for taking a leadership position in advocating change -- something far too many businesses have been reluctant to do.
Question its motive all you like. The only thing that counts is where we end up.
David Lazarus’ column runs Wednesdays and Sundays.
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Do you believe Wal-Mart
sincerely wants to reform the healthcare system?