Employee Health Insurance

Such thinking is perverse. Wal-Mart would still have low prices (maybe not as low) if it were required to provide decent health insurance to its employees. It has found many other ways to lower prices, including high efficiencies in distribution, not to mention extensive use of outsourcing. I never said that the goverment should not be able to regulate private industry. It should, and it does. Your answer seemed to be that Wal-Mart, because of its financial success, should have to provide employees with health insurance. The corollary of this is that the government should analyze every company on an ad hoc basis to determine whether or not the company should have to make such provision. This, I think, is absurd. I am still unsure about us trying to determine what Wal-Mart can and cannot “afford.” Its profits would seem to provide enough money for employee health insurance all around. If a for-profit business does it then the customer subsidises the profit of the business. Insurance works on the premise that fewer people get sick or hurt than actually pay, and if they do then you jack up the payment so, eventually, they pay for their own treatment plus your profit margin. “The second criticism of Wal-Mart’s refusal to provide health insurance to all its employees who do not have other coverage has somewhat greater merit. WalMart makes enough money to provide health insurance for every employee. It chooses instead to run dividends, stock repurchases, and executive compensation several times higher than the norm. Other companies (Costco for example) in the exact same business have provided health insurance for all of their employees. Costco was punished by shareholders for refusing to adopt the lower cost “WalMart” model, even though their productivity per employee and employee satisfaction were much higher. Economic analysis certainly provides insight into many areas, but it certainly does not provide answers to certain normative questions. What is the true value to an employee of health insurance versus their often rationally ill-informed individual evaluation? Further, how should health (or life) be valued compared to other goods provided by our economy? Posner notes that Medicaid may provide inferior service to an individual than private insurance.

If Wal-Mart paid a “living wage” (more of your unintelligible gobbledygook diction) and provided all employees with health insurance, would you then like Wal-Mart? Of course not. If WalMart paid a “living wage” (I suggest you look up that term) and provided employee health insurance, I would not be singling it out for criticism here. Companies can handle living wage and mandatory health insurance regulation. While it might be worthwhile to engage Corey for entertainment purposes, I find it difficult to take his arguments seriously when he uses gross profit (GP) as his measurement of Wal-Mart’s profitablity. He even purports to assert a $40,000 per employee gross profit metric as a club to show how mean old Wal-Mart is. In retail accounting, it’s simple. Suppose that if Wal-Mart paid the entire tab, the average cost to the company of health insurance would be $5,000 per employee per year. More than enough to cover health insurance if that were the priority of management (instead of shareholder dividends). That doesn’t even go into how WalMart’s competitors manage to achieve greater productivity per employee by paying them more and providing greater benefits. The health insurance calculis doesn’t even enter into the mind. As for Walmart employees and most others, today it’s simply a case of, “Thank God I’ve got a job!” If there’s Health Insurance all the better. Walmart and their copy-cats take advantage of the situation.

Federal Employees Health Benefits Program (FEHB) Federal Employees Health Benefits Program opnbrktFEHBclsbrkt Provides health insurance benefits to about 8 million Federal enrollees and dependents. A group health plan is an employee welfare benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care for participants or their dependents directly or through insurance, reimbursement, or otherwise. Second: “WalMart CAN afford health insurance but chooses not to provide it.” Lots of people and lots of organizations and lots of corporations can afford all sorts of different things, but choose not to purchase some of those things. Barring that as unlikely, I would support regulation forcing companies that can afford to provide health insurance to do so. It isn’t that I have a liberal bias against the WalMart aesthetic, it is that I am a socialist. Well, doing nothing is an ad hoc policy that favors the people who need nothing done in order to be prosperous. (Because they already are) I think you should have to justify reliance on “free enterprise” the same way you ask others to justify regulations restricting it. My answer: people do not like what I call the Wal-Mart aesthetic. That’s a perfectly good reason not to like Wal-Mart. I don’t shop at Wal-Mart because I don’t like its stores and its products. I don’t like the Wal-Mart Experience. (Nor do I like the fact that the company’s owners do not provide better health insurance opportunities for some of the company’s employees.) How much do employers that provide fringe benefits actually reduce wages? I would guess that the reduction in wages is less than the value of fringe benefits, because a higher base “salary” attracts more and better job applicants. Health insurance is not cost-neurtral to employers. (Just my hypothesis - as I said, this needs study). Note that the very characterization of wages and health insurance benefits as a “cost” that is opposed to “profit” betrays the value hierarchy at work. Among the many downsides to requiring health insurance of employers is that employers will attempt to evade the mandate by hiring more temp workers, independent contractors, use more machines rather than labor to do the work, or export labor to countries without the health insurance mandate. The result raises costs, prices, and lowers employment prospects in this country.

Unlike Posner, I think perhaps we should be requiring every employer to provide health insurance. Pick your favorite. Personally sam, I would like to see profits taxed in order to provide single payer health insurance for ALL. Perhaps allowing companies to avoid the tax if they were willing to provide private insurance. Wal-Mart should be applauded for increasing efficiency and lowering prices. It would still have every incentive to continue that pattern, even if required to provide health insurance. First off, WalMart CAN afford health insurance but chooses not to provide it. Because WalMart is wealthy and successful, it CAN afford to provide health insurance.

Why should prices be so low that people have to take jobs with no health insurance. “Among the many downsides to requiring health insurance of employers is that employers will attempt to evade the mandate by.”

When most of us talk about health insurance, however, we refer to the kind of plan that covers doctor bills, surgery and hospital costs.

Sounds like we need to socialize health care, then every U.S. company can profiteer in the “free” market without having to worry about pesky morals and insurance costs. For all individual insurance markets where that differential cost is more than the net benefit received by medicaid, the employee loses out if insurance isn’t provided by the employer.

A FAR better alternative to health care or medicaid is for-member-profit public insurance institutions that are not government owned. If the government provides the insurance then it is liable to pass law, take money out of it and make up excuses such as what has happened with the replacement of money in Social Security by Non-Marketable Bonds. Then the company can either provide health care or pay the employee the difference. It’s cheaper for the company because they do not have to maintain contact, and it benefits the employee because they can make more. There are debates every day in local communities about whether Wal-Mart should be allowed to locate in a particular place, or encouraged to do so. The fact that Wal-Mart’s practices with regard to its employees may increase the burden on the local public health system because of its use of part time help and its choice to not provide medical care is, even in the Posner/Becker analysis, a factor that should go into the analysis of whether a community works to facilitate Wal-Mart’s arrival. A final point. Low health benefits for Wal-Mart employees might benefit a broader population through lower prices, but that does not mean that those interests are more important than the concentrated interests of Wal-Mart employees. Most private sector health plans are covered by the Employee Retirement Income Security Act (ERISA) Employee Retirement Income Security Act opnbrktERISAclsbrkt.

Over 20 million members of the Federal Family, including Federal and Postal employees and annuitants, members and retired members of the uniformed services, and qualified relatives can apply for this insurance. Flexible Spending Accounts (FSAFEDS) Flexible Spending Accounts opnbrktFSAFEDSclsbrkt Flexible Spending Accounts enable eligible employees to pay for certain medical and dependent care expenses with pre-tax dollars. Federal Employees’ Group Life Insurance Program (FEGLI) Federal Employees’ Group Life Insurance Program opnbrktFEGLIclsbrkt Established in 1954, the Federal Employees’ Group Life Insurance (FEGLI) Program is the largest group life insurance program in the world, covering over 4 million Federal employees and retirees, as well as many of their family members. The new Federal Employees Dental and Vision Insurance Program (FEDVIP) will be available to eligible Federal and Postal employees, retirees, and their eligible family members on an enrollee-pay-all basis. This new Program allows dental and vision insurance to be purchased on a group basis which means competitive premiums and no pre-existing condition limitations.

State employees and their families now have access to a new online wellness resource through Revolution Health . State employees and their families now have access to a new online wellness resource through Revolution Health.
You may have heard terms like “managed care,” “Fee-for-Service” and “indemnity.” These words define different types of coverage or health plans widely used by today’s consumers. The secret? Patients have to stay within the plan’s network of providers and health facilities to get the best benefits. Managed care plans, on the other hand, have agreements with certain doctors, hospitals and health care providers to give a range of quality health services at a reduced cost.

For questions about the provisions under the Public Health Service Act, contact the Center for Medicare and Medicaid Services in the Department of Health and Human Services (HHS). For questions about the tax provisions in the Internal Revenue Code relating to health plans, please contact the Internal Revenue Service. You think risks to life can be quantified in a non-arbitrary manner? Fine. How much would you personally need to be compensated to take a chance that would result in death with a 95% probability? How much would you need to be compensated to suffer a major, irreversible decline in your health? If you are like most rational individuals, you have difficulty answering these questions. Obviously, income plays some role in health outcomes aside from adequate medical care, and that should be taken into account. (For example, higher incomes might provide more nutritious meals.) I suppose my bias is clear, I do not think that health (or life) can be rationally traded for other commodities and I also believe that it is not unreasonable to say that health is more important than most other commodities and should be placed far above them. As for not giving up cable, the point was that people make different choices. Some middle-class families care about investing in their future by purchasing stock and bonds and saving for retirement, catastrophic health costs, and college education for their children. Why should people be able to invest and reap benefits without exposing themselves to liability? The worker is exposed to liability. workplace injuries, mass layoffs, periods of unemployment, un-insured health costs. Capital can mismanage and ruin the company, causing 10,000 people to lose their jobs, then they can just walk off without so much as damaging their credit rating. They are paid out of the Gross Profits, as has been discussed. In the end, I think that Posner’s analysis is interesting, but flawed. It reduces a very hard normative question into a very easy economic/math problem based on the assumption that everything can be translated into some common value. The real question we should be asking is probably what can we do as a society to create better health outcomes, without somehow thinking that health can be exchanged for other commodities, such as say, sports cars or nice jewelry. The only question, then, is who should make the decisions as to how much to value life and health. If once health is degraded it cannot be improved (which is sometimes the case), then in that situation, good health cannot be monetized in any non-arbitrary manner. It is just like the flawed conception of some economists that anything other than a totally arbitrary value can be attached to human life. (Obviously, we are sometimes pragmatically driven to come up with such a value, but in principle, any such value is arbitrary.) Simply put, there are not any number of commodities or services that can replace life and health. If presumably, inferior service at least sometimes means less favorable health outcomes and if one believes that health is simply not rationally exchangeable for money, then it seems that economic analysis is missing something very important.

Having acknowledged that government should protect property interests (even if violated in a non-violent manner) I think you must come up with a more convincing rationale as to why other interests (such as health through access to health care) should not be protected. This you have failed to do, other than by your blind assurance that democratically legitimate government action is inferior to the free market. I do fear, however, that nationalizing or socializing the entire health care system would deteriorate the quality of the system. Of course, for those currently without access to the system, its quality is not really an issue. (Most hospitals cannot refuse treatment of seriously ill and/pr injured people. For all its faults, medicaid is a tax-supported healthcare plan.) I would like to see more discussion of a health care tax similar to what you mention. As for the demand calculii, wether it be elastic, inelastic or uniltary: I’m still trying to come to grips with all the implications and nuances of the analysis. I’ve just got one problem, how many Americans actually go into such an analysis when it comes to health care? Everyone I’ve ever known simply makes a triadic decision.

And without employees, the company would not exist nor make money. Does ownership or labor have a superior right to profit? Of course we all know by now that Winfield believes in the Divine Right of Capital, so he says ownership.” Is Walmart good for its employees? Is Walmart good for America? Who cares, the company is making money and its Executives are getting their bonuses. I wouldn’t. shop there either. Your distaste for the Wal-Mart aesthetic pervades your arguments about its pay rates and benefit packages. If individuals should be free to choose what products they want to purchase, why shouldn’t a private company be able to choose what pay rates and benefit packages to offer employees? Those employees are free to accept or decline the offer. If we can answer those questions, or even come close to answering them, then we can determine the total cost to SOCIETY, rather than to the individual company or employee, of Wal-Mart style terms of employment. If it charges the employee $1,000 a year in premiums, the cost to Wal-Mart will be only $4,000, so it will be willing to raise the employee”s salary by $1,000. This may seem a complete wash, but it is not.

Congrats on being able to distinguish between two whole systems of thought. “and he plans to do that by forcing Wal-Mart managers to distribute supra-competitive wages to its employees OUT OF RETAINED EARNINGS.” Oh, so now they are “retained earnings”? Oh yes, I agree that sounds much less like something workers might be entitled to share in than does “profits”. Investing in Wal-Mart may be one way to do that. Corey wants to levy a consumption tax on middle-class families: every time they purchase Wal-Mart goods or purchase Wal-Mart stock, he wants them paying a higher price - and he plans to do that by forcing Wal-Mart managers to distribute supra-competitive wages to its employees OUT OF RETAINED EARNINGS. He wants dividends going not to shareholders, but to employees.

For with the employee paying a big chunk of the premiums, the total cost is likely to be lower than $5,000, which would permit a net wage increase. The reason it is likely to be lower is that employees will economize on their demand for medical care if they incur a positive marginal cost for that care. Much of Walmart’s decision to retain a high proportion of part-timers (and therefore many employees who are ineligible for medical benefits) is due to the nature of retail business and not necessarily corporate greed and avoidance of paying medical benefits. I do think, however, that medical costs are effecting Walmart’s decisions, but it’s wrong to assume that is the only (of even the principal) reason for their actions. Absent pressure, it has obviously spent surplus profit on shareholder benefits instead of employee benefits. Except you used the term “gross profits” - which is more acturately called “gross/profit margin” or “gross income” - to argue that employees should receive a larger share of profits - not a larger share of revenues. You didn’t say “Employees should have higher salaries,” you said, “Shareholders don’t deserve to be compensated for their risk BECAUSE THEY ARE SHAREHOLDERS, and their profit should go to workers instead.” A corporation can be incorporated, functional and making profit with nothing more than a skeleton crew of directors and officers - meaning no “workers,” or employees, because everyone there is a manager or executive. When looking at Wal-Mart’s numbers, GP is available for what? Dividends to shareholders? No. Big piles of cash? No. GP is used for every other expense of the company! That includes all employee salaries, rent, capital expenses, marketing, G & A, etc. Using GP in this case is horribly misleading. There is an easy way for that to happen - the employees can purchase stock. Or, the company can give its employees stock as part of its compensation package.

Where is your evidence? Show me the “overseas slave labor,” point me to the place where Wal-Mart is “the only available retail outlet” or to the place where Wal-Mart is homogenizing “local cultures” (whatever that means), and please provide some evidence for the company’s hillbilly treatement of customers and employees. Maybe, but the disincentive is more than matched by the companies ability to extract 2 or 10 times as much from the fruits of an employees labor as it pays the employee. I don’t know sam, maybe three posts up where I listed the hourly wages of the CEO ($8K), the average U.S. employee ($9.68), and overseas labor in several countries (17 cents). I am the only person using real numbers in my posts this week. I understand that Gross Profit is used to pay salaries, benefits, and other expenses. As such, the gross profit per employee is relevant to a discussion of how much WalMart should/could allocate to wage and benefit expenses. After all expenses, WalMart had ten billion left over last year, or $5900 per employee.

Possible sources of pressure are: employee unions, consumer outcry, government regulation. Democratically legitimate government action can involve more or less discretion on the part of government employees, something that you also fail to consider.

“Employees are not paid out of the profits.” They are paid out of the Gross Profits, as has been discussed.

Winfield, I cited harmful effects on other retail, shipping, and manufacturing industries. Add those to the 1,700,000 WalMart employees, as well as the millions of overseas workers, and that’s a whole lot of people geting lower wages in exchange for lower prices.

As Posner points out, there are many other places that people could choose to associate group insurance with: fraternal organizations, religious institutions, and the like. In addition: The point about individual insurance being more costly than group does not lead to the conclusion that requiring employers to provide it is the best option. Posner’s math fails to account for the differing costs of personal and group insurance.