Wal Mart not only targeted on Health Insurance

Wal-Mart CEO Lee Scott trooped before the National Governors Association several days ago to beg for leniency concerning the AFL-CIO’s attempt in 30-odd states to gain enactment of so-called “Wal-Mart laws” requiring big employers to spend as much as 9 percent of payroll on health insurance or else pony up the difference in taxes. Liberal elements of the political class are seizing an opportunity to push health care mandates once again.

The public theory behind the “Wal-Mart laws” is that supposedly low-wage employers are shirking their “duty” to provide a health-care entitlement to their workers. As a result these workers take advantage of state Medicaid programs, and therefore employers who do provide health benefits end up subsidizing those who don’t via state taxes.

The grubbier reality: Wal-Mart long has been a target of largely unsuccessful union organizing activity. That may have much to do with the AFL-CIO’s sudden interest in Wal-Mart workers’ health care benefits.

In a health care entitlement, it seems, the AFL-CIO finally has a foothold against its nemesis. A closer look, however, reveals much bigger plans for the unionist health measures. While Maryland famously passed a law that effectively applies only to Wal-Mart, elsewhere AFL-CIO drafts would broadly include most employers in a pay-or-tax health insurance scheme.

The underlying assumption of the entire debate is that employers should be obliged to provide comprehensive health care to their employees — everything from minor expenses to major hospitalization. State Medicaid programs largely have taken the same approach; it’s little wonder that Medicaid benefits may look attractive compared to affordable, high-deductible health insurance that actually functions as insurance by providing protection against large expenses but not small ones.

The average cost of employer-provided health insurance is quickly approaching the cost of a 30-year mortgage on an average-priced home. Are employers next to be expected to provide homes as well as routine health care? What about cars? Most people need those, too. Follow this logic to its conclusion and what you have is something resembling indentured servitude, with all major life expenses provided by the employer through a government mandate. It’s obviously not a sustainable model.

Rather than attempt to impose a mandate for entitlement-style health care, policymakers should look for ways to infuse health care with something resembling market competition — beginning with making it easier for individuals to buy high-deductible individual health insurance apart from their employers.