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Wal-Mart announced yesterday that it is offering what it calls improved options for employee health care, which will include lower deductibles, $4 generic drugs, and reduced restrictions on employees utilizing the various plans. The company also said that the change in offerings will increase its health care expenditures while lowering expenses for its employees.

There are numerous stories in the media this morning about the Wal-Mart decisions, with different papers taking different approaches.

The New York Times is perhaps the most complimentary: “Starting Jan. 1, Wal-Mart’s insurance will look a lot like that offered by many other American companies, but with some twists that even longtime critics described as innovative. Independent experts praised several features of the plan and said it could represent a turning point for the retailer, the nation’s largest private employer.”

USA Today emphasizes, for example, that employees will have “a choice between four annual deductibles: $350, $500, $1,000 or $2,000, a change from this year when plans had annual deductibles of $1,000 or $2,000. The amount paid by workers for monthly premiums increases as the deductible goes down.” And, “to offset those deductibles, employees can choose between $100, $250 or $500 ‘credits’ Wal-Mart will pay for medical care before the worker pays the deductible. The higher the credit, the higher the premium.”

The Wall Street Journal, on the other hand, says in its lead that Wal-Mart “anticipates the costs it incurs for its employees' health coverage will increase next year under new options it will offer,” and notes shortly thereafter that “the changes will boost the costs Wal-Mart incurs on a per-employee basis for health-care coverage, though the increase will remain ‘in line’ with those seen in prior years, said Linda Dillman, the retailer's executive vice president of risk management, benefits and sustainability. She declined to divulge Wal-Mart's exact outlay. However, a 2005 internal memorandum outlining methods for curtailing increases in Wal-Mart's health-care spending noted that, from 2002 to 2005, the retailer's annual health-care costs rose 19% to $1.5 billion.”

The Times also notes that the new Wal-Mart plans “emphasized preventive care, paid for by the company before a deductible kicked in. Health care credits, for example, would make it possible for employees to see doctors and buy prescription drugs without paying anything out of pocket.”

Longtime critics of the company, such as the union-funded, said that while the new plans represented a step forward by the retailer, it was not enough.
KC's View:
I’m not a health care expert, but it sounds to me like Wal-Mart is making real progress here. Some folks won’t be satisfied until the retailer provides total coverage at no cost to the employee, but that isn’t a good idea on all sorts of levels – it would an economic nightmare for Wal-Mart, and, quite frankly, employees need to have some skin in the game.