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In a surprise move, Maryland became the first state to enact a bill requiring the state’s Wal-Mart stores to spend 8 percent of their payroll on health care for their workers. The AFL-CIO, which pushed the Fair Share Health Care bill, says it has lined up campaigns in 33 states to pass similar legislation to stop the largest corporations from “shifting health care insurance costs onto workers, taxpayers and other businesses.”
Wal-Mart is considering a lawsuit to try to overturn the new law. And the test case can be expected to touch off furious lobbying campaigns in other states. California, New Hampshire, Rhode Island, Washington and Colorado are believed to be among the most likely to try to follow suit.
Maryland has a point. However flawed the current health-care coverage system is, it remains in the province of business to supply coverage of its employees. When it does not, the cost goes to everyone else. For example, when people can’t get health insurance they frequently resort to Medicaid or the emergency room, and taxpayers ultimately pay the bill. Wal-Mart is said to insure fewer than half of its 1.3 million U.S. employees.
Wal-Mart, too, has a point. A recent confidential memo from that company called benefit costs “unsustainable” and said they were rising 15 percent a year and would amount to 12 percent of profits by 2011.
Business firms generally, small as well as large, face rapidly growing health-care costs. The New York Times reported that retail and restaurant chains are preparing a campaign to prevent lawmakers from passing similar legislation. It noted that those chains are most vulnerable to mandated health-care spending because they employ so many lows-income workers.
A significant comment by Gerald Shea, governmental-affairs adviser to AFL-CIO President John Sweeney, was quoted by The Wall Street Journal: “An explicit part of the program is to put pressure on organizations nationally to do national reform. If people can’t manage the political will to do something nationally to solve this problem, then would they like to deal with us in 50 different ways in 50 different states?”
Mr. Shea, reached for comment, said that the AFL-CIO’s ultimate preference is for a universal, single-payer national health system, but he described that as a “Holy Grail,” not attainable in the near future. So, starting five years ago, the union organization’s emphasis has been on pressing employers to do a better job of providing health care.
If nothing else, that strategy will highlight the burden that health care coverage represents to business. While Maryland may be over-reaching by forcing Wal-Mart to provide benefits, it has given this debate the prominence it deserves and may force the nation to finally confront the disparities of its patched-together health coverage.
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