Health Care Reform and Wal-Mart Employees

[Neecy]

Do you like the health insurance plan you're currently getting from your employer? If so, we're being reassured that you can "keep it"...what's unsaid is that if you don't like your current employer-provided plan you'll have to keep it, even if it's not adequate for you or your family, or risk losing the tax benefit of getting insurance through your employer. This is a good summation of the tax provisions that are currently in place, and will remain in place under "reform":

Roughly 176 million people receive health insurance through their employer. The way the system now works, your employer chooses one or more insurance plans and pays a good deal of the premium. Besides getting subsidized health insurance, you also enjoy a tax benefit: the employer's contributions for health insurance are deducted from your gross income, meaning you pay tax on a smaller amount. Premiums paid by people who have to buy their own insurance are not tax deductible.

So, employer-provided health insurance is a bonus from the income tax point of view. But from a choice point of view, it's limiting. You have to take what your employer offers or purchase insurance on the open market, likely at a much higher cost because you would lose the tax break and also the benefit of risk pooling.

http://www.politicsdaily.com/2009/10/02/sen-ron-wyden-no-choice-in-senate-health-care-bill/

Under the variety of "reform" bills now being considered, those already insured through their employers won't be eligible for either the public option (if it survives) and they won't be eligible to purchase a more suitable plan through the insurance exchange, even if they're willing to lose the employer subsidy and the tax benefit:

The legislation is intended to preserve the existing employer-based insurance system -- at first, only small businesses and people who aren't covered through their jobs will be allowed to buy plans on the new exchange. Over time, access to the exchange may be broadened, though this raises the possibility that if people buy insurance on the exchange instead of on the job, employer plans may be left with a smaller pool of employees who have greater health-care costs, a situation that could make those plans hard to sustain.

Ron Wyden believes that excluding those who are currently covered by their employers isn't giving them the "choice" that they were promised when the debate on HCR began. He introduced an amendment in the Senate Finance Committee that would, indeed, give workers a true choice.

Wyden's Free Choice amendment said workers could stick with their employer's plan or, in certain circumstances, receive a voucher, buy a policy through a proposed insurance exchange and get the income tax break on the premium amount. As Wyden explained at a meeting at the Tax Policy Center earlier Thursday, "Since a typical family of four spends about $14,000 in health insurance premiums, they would receive a tax cut for shopping in the marketplace where they would be rewarded for shopping around for the best policy." Wyden suggested that the payment might take the form of a progressive tax deduction from the individual's taxable income.

"My amendment will meet President Obama's two guiding principles for health care reform," he told the group. "One, it gives individuals a choice. They can keep their current policy or they can choose an alternative from the marketplace. Second, it creates competition in the insurance marketplace."

Wyden said the main focus of his plan was to give workers the ability to choose their insurance policy. As Wyden put it at the Tax Policy Center meeting, "millions of Americans have no choice at all over their insurance policy because their employer makes that choice for them."

Unfortunately, Wyden's amendment was withdrawn due to lack of support in the Finance Committee.

Why does this matter? Who cares? Well, Wal-Mart employees might care.

Wal-Mart brags about the health care insurance they offer their employees, and indeed they do insure their full and part-time workers. What they fail to publicize is exactly the kind of insurance they provide.

The key to the Wal-Mart plan is the deductible: $1,000 per year for individuals, $3,000 for families.

How difficult is it for these low-wage employees to meet their deductible? Pretty hard, which is why this is basically a catastrophic care plan rather than a standard health insurance plan:

Items that are NOT applied to the standard deductible:

Office visit co-pays
Emergency Room visits
Ambulance services
Per-Event deductibles
Pharmacy co-pays

Heck of a plan, isn't it?

We're missing the point here. Yes, the public option is important but given the tiny number of people who would be eligible for it it's mainly symbolic at this point. What this reform is missing is true "choice", the ability of a Wal-Mart employee to tell them to shove their junk insurance. And Wal-Mart is far from the only employer offering a bare-bones plan, and low-wage employees are least able to afford paying so many out-of-pocket costs.

I'm not trying to bash Wal-Mart or the people who work for them. I'm simply pointing out how weak this "reform" is actually going to be under ANY version of the plan.

[PeaceNikki]

1. This plan is similar to what MANY employers have gone to.

PPO's and HMO's with carte blanche services with minimal co-pays are the rarity these days. High-deductible with HSA is the norm.

[madmom]

2. My So is a retiree from a major corp his insurance is not much different and we hate it also, we

cannot change ours either.

[dembotoz]

3. keeping you old plan is not always good

single payer is the only way.
period