Wal-Mart bill is celebrated, despite ruling

THE BALTIMORE SUN

Maryland's bill requiring Wal-Mart Stores Inc. to pay more for employees' health care never went into effect before a federal judge threw it out, but backers of the legislation say it had a tremendous impact nonetheless.

They say the passage of the "Fair Share" health bill pressured the giant retailer to offer cheaper health plans and provide benefits to more part-time employees, and prodded more states to take up health care reforms in the absence of leadership from Washington.

Gov. Robert L. Ehrlich Jr., whose veto of the bill was overridden in January, said yesterday that the debate about how to expand health care access can and should continue, but that the judge's decision means the Wal-Mart bill won't be part of it.

"The Wal-Mart bill really had nothing to do with that debate," Ehrlich said. "The Wal-Mart bill didn't really provide health care to anyone."

Supporters of the bill said there is plenty of evidence to the contrary.

In April, Wal-Mart announced that it would cut in half the period part-time employees have to wait to be eligible for health insurance.

The company said the children of part-time employees would be eligible for health care and that co-pays for some widely used prescription drugs would be reduced by 70 percent.

In an internal Wal-Mart memorandum, first published in The New York Times in October, a top company official acknowledged that Wal-Mart's critics were right that the company's health benefits were too expensive for many employees, and that many of them take advantage of public assistance programs instead.

Company spokesman Dan Fogelman said Wal-Mart has made improved benefits a focus in recent months and has offered an expanding array of plans to make health care more available.

"When our open enrollment period opens this fall, many associates will see even lower premiums available than what they're paying today," Fogelman said.

Vincent DeMarco, president of the Maryland Citizens Health Initiative and one of the leaders in the effort to pass the bill, said the state legislation was a key contributor to the improvement in Wal-Mart benefits.

"It's not because of the legal impact of the law but because of the debate around the law that Wal-Mart has found it necessary to expand health care," DeMarco said.

Fogleman said the impetus for the changes came from employees, not political pressure. But the new benefits became a potent lobbying tool for the company as it tried to stop Maryland's law from spreading to other states.

Washington state, like Maryland, had been considering Fair Share legislation for a few years, but it wasn't until Maryland passed its law that the company started intensive lobbying in Olympia, the state capital, said state Rep. Steve Conway, a Democrat from Tacoma who chairs the House Labor and Commerce Committee.

As in Annapolis, Wal-Mart galvanized many of Washington's business organizations against the bill, Conway and others said. But it also sought to undercut the rationale for the bill by telling lawmakers that it was improving its benefits on its own.

"Before our committee hearing, Wal-Mart did fly in a big executive, ... and she did bring out the fact that they were improving their plan, and, actually, during our consideration of the legislation, they again improved the plan," Conway said.

Maryland Attorney General J. Joseph Curran Jr. said he would file an appeal of the federal circuit court decision within 30 days in an effort to reinstate the Maryland law, which had been due to take effect in July next year.

Top lawmakers said they expect the debate in Annapolis over expanding health care to go beyond the Wal-Mart bill next year as the state seeks ways to reduce the rolls of the uninsured.

The law would require all companies with 10,000 or more employees in Maryland to spend at least 8 percent of worker payroll on health care or give the difference to the state for its Medicaid fund.

Four companies meet the employee threshold, but Wal-Mart is the only one that spends less than 8 percent.

Passed in the spring of last year and enacted in January, the law emerged at a time of extensive efforts by states across the nation to amend or overhaul the system of employer-based health coverage that has been in effect for decades.

National labor unions - who have been engaged in a long-running feud with anti-union Wal-Mart - played a major role in securing passage of Maryland's law.

They predicted after this year's veto override that legislatures in as many as three dozen states would follow.

That hasn't happened. Maryland remains the only state to have passed a Fair Share bill. But with efforts to reform health care at a stalemate on the national level for more than a decade, several other health initiatives passed in Washington and other states this year.

The most highly publicized effort to expand health access since Maryland's action came in Massachusetts, where legislators passed a bill in April that will require all residents to have health insurance and nearly all employers to subsidize it.

That legislation shares some key concepts with the Maryland bill, notably the idea that companies that do provide health insurance shouldn't be at a competitive disadvantage to companies that don't.

But Massachusetts' effort, which proponents say could provide universal coverage there within three years, went much further.

Ed Haislmaier, a research fellow at the Heritage Foundation, which helped author the Massachusetts plan, said it allows people to shop for benefits independent of their employers, meaning they can maintain coverage if they lose or change their jobs.

Maryland Sen. E.J. Pipkin, an Eastern Shore Republican, introduced several Massachusetts-style reforms in this spring's legislative session to allow consumers to choose from a menu of benefits.

Haislmaier said the Massachusetts reforms are the hot topic of discussion among legislators nationwide, but that Maryland's law will have had an impact on the debate even if the judge's ruling is upheld on appeal.

"The state of Maryland contributed a sense of manufacturing a crisis, if you will, a sense of urgency," Haislmaier said. "It forced to the forefront a bunch of problems that people knew were there."

Curran said he hopes that the political wrangling over Wal-Mart will give way to more new ideas for expanding health access.

"We've got to get away from the rhetoric about 'Is it going to cost Wal-Mart more money?' and 'Is it anti-business?' and say it's the role of government to be concerned about its citizens, and there are 800,000 of them who don't have health insurance," Curran said. "We keep experimenting and trying different ways, but we're moving in the right direction."

andy.green@baltsun.com

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