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Commentary

HilaryCare Returns
Wall Street Journal, 1-16-06

Marylandís answer to rising health-care costs has been to pass union-backed legislation requiring that some large employers (read: Wal-Mart) put aside a set percentage of funds to buy health insurance for its employees. The Journal argues that this is not only wrong-headed, but penalizes companies that find innovative solutions to rising insurance costs. In short the legislation is part of a national, union-funded attempt to impose HilaryCare via state legislation.

That's the larger meaning of last week's events in Maryland, where the state legislature overturned the veto of GOP Governor Robert Ehrlich and passed a bill forcing any employer in the state with more than 10,000 employees to spend at least 8% of its payroll on health care or pay the state the difference. There are only a handful of companies that large in Maryland -- Johns Hopkins University and Giant Food, a grocery chain competing with Wal-Mart, among them. Only one meets all the criteria, however, so the legislation was dubbed "The Wal-Mart Bill," which in part it is.
But no one should think this will be an isolated political event. The state AFL-CIO threw everything it had into the bill, including a vow to withdraw support from any lawmaker who didn't vote to override the veto. Democrats who dominate both houses of the Maryland legislature went along. The national AFL-CIO now plans to use the Maryland law as a model for legislation in other states.

Manhattan Institute senior fellow Steve Malanga has written that, in fact, Wal-Martís health-care policies are much more innovative than unions would have us believe:

ÖWal-Mart endorses [the ideas of] many health-policy reformers who say that current corporate and government health plans, offering lavish coverage with little contribution from workers, have encouraged over-use of the system and helped spark runaway medical inflation. To discourage that, Wal-Martís health plans have high deductibles and donít pay for extras like eye exams, chiropractic visits, or contraceptives. But the company will pay 100 percent of an individualís health-care costs beyond $1,750 and has no lifetime caps on coverageóunlike more than half of other companies. As a result of its policies, Wal-Mart spends about 37 percent less per covered employee on health insurance than do similar companies

So the effect of Marylandís legislation is to penalize a company that has found a way to offer low-cost insurance to its employees. Rather than being part of the solution, Marylandís legislature, at the behest of partisan interests, is contributing to Americaís health-care woes.



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