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Commentary

Under fire, a giant employer offers a useful health plan
USA Today, 11-7-05

In the midst of a barrage of criticism, USA Today offers Wal-Mart a few words of encouragement. USA Today argues that Wal-Martís decision to offer its employees basic health savings accounts is an important reform that should be applauded.

As Americans confront higher costs during company enrollment periods this fall, or worry about losing coverage altogether, Wal-Mart is promoting a new choice that deserves better than the knee- jerk dismissal it has gotten from the company's critics. Wal-Mart's plan couples low premiums ($11 to $65 a month) with high deductibles. The first three doctors' visits and three prescriptions are handled with nominal co-pays. To help employees pay out-of-pocket expenses up to the deductible, Wal-Mart also promotes tax-free health savings accounts, a kind of 401(k) plan for medical expenses.
Though no cure-all, Wal-Mart's approach is a worthy experiment that could be attractive to other companies struggling to expand coverage but control health expenses. Ö
Wal-Mart's health care costs have climbed 19% a year since 2002. To reverse the tide, Wal-Mart is thinking of moving its entire workforce into plans that include health savings accounts. It will match employee contributions up to $1,000. Whatever isn't spent collects interest and belongs to the worker, even if he or she changes jobs. For the concept to work, Wal-Mart must do more to educate workers about health issues and help them deal with the system's complexities. With its economic clout, Wal-Mart also hopes to create networks of health providers who deliver quality care at the best price. If there's anything Wal-Mart excels at, it's negotiating price with suppliers.

Wal-Mart is following a path blazed by companies like Whole Foods, which embraced similar health savings accounts with remarkable employee satisfaction and success.



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