David Lazarus of the Los Angeles Times had a column this weekend in which he noted the general astonishment that seems to have accompanied the letter written by Walmart CEO Mike Duke last week to President Barack Obama, supporting a federal mandate that all employers provide health coverage. In his column, Lazarus notes that “Walmart also says it supports a mandate for all uninsured people to buy reasonably priced coverage -- another key element of the healthcare debate.” Furthermore, Lazarus says that a conversation with Walmart spokesman Greg Rossiter left him with the distinct impression that “Wal-Mart apparently remains open to Obama's proposal for a public insurance plan that would compete with private insurers.”
Not only that, but one of the co-signers on the letter was Andrew Stern, president of the Service Employees International Union, which, Lazarus writes, “has been at odds with Wal-Mart in the past but is aligned with the company on healthcare issues.”
In addition to general astonishment about Walmart’s position – this is, after all, a company that has been portrayed as being militantly against providing adequate healthcare insurance to its own 1.4 million US employees – there also seems to be a general consensus that the letter makes it harder for others in the business community to argue against the Obama proposals.
Lazarus does some intriguing analysis about the possible logic behind Walmart’s position:
“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.”
Not only that, but one of the co-signers on the letter was Andrew Stern, president of the Service Employees International Union, which, Lazarus writes, “has been at odds with Wal-Mart in the past but is aligned with the company on healthcare issues.”
In addition to general astonishment about Walmart’s position – this is, after all, a company that has been portrayed as being militantly against providing adequate healthcare insurance to its own 1.4 million US employees – there also seems to be a general consensus that the letter makes it harder for others in the business community to argue against the Obama proposals.
Lazarus does some intriguing analysis about the possible logic behind Walmart’s position:
“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.”
- KC's View:
-
In other words, there’s more than a bit of self-interest at work here.
But that’s okay. Walmart is a public company, and isn’t in the altruism business.
The thing is, Walmart is doing a very smart thing here - positioning itself as being a “good” company as it continues to rehabilitate an image that has taken its share of beatings in recent years. The rationale almost doesn’t matter if it leads to lower costs and better care. (There will be plenty of people who will argue that some of the health care proposals being made by the Obama administration will do neither. But that’s another argument.)
