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The New York Times this morning reports that Wal-Mart, long criticized for not providing its workers with adequate and affordable health insurance, will offer its 1.2 million US employees a new set of benefits that will in some cases have monthly premiums as low as $11, as well as offering employees the ability to open health savings accounts.

"We are lowering the costs to make health insurance more affordable,” Wal-Mart spokesman Dan Fogleman tells the NYT. While conceding that the company has been criticized for its insurance offerings, Fogleman says, "It's fair to say we are listening, but more so to our associates than anyone else."

Much of the criticism of Wal-Mart has centered on charges that its insurance was so expensive that some employees have to go on public assistance in order to compensate for high medical expenses. Currently, fewer than half of Wal-Mart's workers are covered by company health insurance, the NYT notes; the company’s employees can start enrolling now in the new program, which takes effect in 2006.

“Those who participate will pay a $1,000 deductible, the maximum under Wal-Mart's insurance for 2005,” according to the NYT. “Monthly premiums will be, on average, less than $25 for an individual, $37 for a single parent and $65 for a family. The $11 premium, for individuals, will be available in a handful of areas, Mr. Fogleman said. But the plan is unlikely to cover a complicated illness or expensive hospital stay during the first year, when there is a $25,000 insurance cap. (The cap is lifted for the second year.) Out-of-pocket payments range from $300 for prescriptions to $1,000 for hospital stays.”

The Times reports that “health insurance specialists generally praised the new plan, saying its lower premiums were likely to attract more employees and thereby reduce the ranks of the uninsured. They also noted, however, that the plan's $1,000 deductible would be high for Wal-Mart workers, particularly older employees who are likely to visit doctors more often, and might not cover expensive treatments, particularly in its first year.”
KC's View:
There will, of course, be critics of the new plan. It is the nature of the beast, and some of the criticisms may even be valid.

But that doesn’t change the fact that Wal-Mart is doing what it can to blunt many of the various allegations and criticisms that have hampered its growth and sullied its image in recent years. You have to admire that.

Is it perfect, or a perfect solution? No. Of course not. But it is a first step, and one that the company’s employees – and, we suspect, its investors – will welcome.