Breaking: Wal-mart (!) Backs Key Reform Principle

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THE TREATMENT JUNE 30, 2009

Breaking: Wal-mart (!) Backs Key Reform Principle

Should the government require that employers either provide their workers with health insurance or pay some money to help defray the cost? Wonks call this an "employer mandate" and it's among reform's more controversial notions.

Most reform advocates support the idea, arguing it's necessary both to raise the money necessary to finance universal coverage in the early years and to protect existing employer coverage for people who already have it. But many conservatives, not to mention many trade groups, detest the idea--calling it an unconscionable burden on business and overreach of government authority.

Starting today, those critics are going to have a harder time making their argument stick. And it's all thanks to Wal-Mart.

Yes, Wal-Mart--the company famous for finding new and creative ways to squeeze employee health benefits--has today endorsed, in principle, an employer mandate. It did so in a letter issued jointly with the Center for American Progress and Service Employees International Union (SEIU):

We are for shared responsibility. Not every business can make the same contribution, but everyone must make some contribution. We are for an employer mandate which is fair and broad in its coverage, but any alternative to an employer mandate should not create barriers to hiring entry level employees. We look forward to working with the Administration and Congress to develop a requirement that is both sensible and equitable.

It's a broad statement and, as always, the meaning of the commitment depends a great deal upon the details. But this is not a small thing. By endorsing the idea of a employer mandate, Wal-Mart has made the idea more difficult to demonize. It has also--and I can't stress this enough--given some political cover to members of Congress who might be sympathetic to the idea of employer mandate but hesitate to take a vote that might be perceived as anti-business.

Remember, there's a huge difference between voting for something all businesses oppose and voting for one that includes among its supporters a huge, iconic corporation.

Naturally, Wal-Mart insisted upon a condition: In the letter, it calls for the "strongest possible commitment to rein in health care costs." But Wal-Mart has helped advance that cause, too, by putting the company's imprimatur on two solid, specific proposals.

One, which Senator Jay Rockefeller has been championing lately, would strengthen the power of the Medicare Payment Advisory Commission (MedPAC) to guide the way Medicare pays for medical services. The other, which comes from the Bipartisan Policy Center, would create a "trigger" mechansim; basically, if health industry groups couldn't deliver savings they've promised, automatic payment reductions would ensue.

I don't want to make too much of this: Wal-Mart may chicken out once the specifics of an employer mandate end up on the table. Even if they don't, they may not lift a finger to help. And, make no mistake, Wal-Mart is acting--as it always does--out of pure self-interest.

My undestanding is that, after all of these years, Wal-Mart has suddenly found itself in the same situation its competitors once did: Dealing with unpredictable health costs and facing new competition from businesses that have found ways to spend even less on employee health benefits. Is there some justice there? You bet.

On the other hand, politics is all about channeling self-interest so that it serves the public good. And the timing of this is pretty telling.

This deal has been in the works for a while. The fact that Wal Mart decided to go public today--a moment when the legislative process has hit some bumps--suggests they wanted both to help boost reform's prospects and to get some leverage. As hard as it may be to believe, the two things may not be mutually exclusive. At least not entirely.

Update: Igor Volsky has more of the details. And The Hill's Jeffrey Young notes that this pits Wal-Mart against the U.S. Chamber of Commerce, among other business groups.

--Jonathan Cohn 

 

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posted in: the treatment, business, education, health, labor, law, politics, social issues, technology, wal-mart

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