Maryland won't challenge a federal court decision striking down the state's "Fair Share" health care act, ending a two-year effort to force Wal-Mart Stores Inc. to pay more for employee health care, Attorney General Douglas F. Gansler said yesterday.
Gansler - who made the announcement standing alongside representatives of the O'Malley administration, the comptroller's office and labor groups that pushed for the first-of-its-kind law - said he concluded that an appeal was likely to fail.
Even if an appeal succeeded, Gansler said, litigation could take years and delay other efforts to more directly extend coverage to the 800,000 Marylanders who lack health insurance.
The so-called Wal-Mart law made Maryland a national target of scorn from conservatives who said it cemented the state's reputation as hostile to business.
It was heralded by the AFL-CIO and other labor groups as a model for making sure business pays its fair share for health care.
Since then, the spotlight has shifted to other states such as Massachusetts and California, which have attempted to enact universal health care. Maryland leaders said yesterday that they intend to look toward those examples and others for their next steps. They said the Wal-Mart law was a success even though it never took effect.
"Fair Share had a great impact in the state and on the nation," Gansler said. "Today, Wal-Mart offers health care to more of its part-time employees and has drastically reduced co-payments for prescription drugs."
Business groups hailed the state's decision, saying it sets the stage for a comprehensive solution.
"Just as easily as bad things can be created here, good things can be created here," said Robert O.C. Worcester, president of Maryland Business for Responsive Government.
Maryland Chamber of Commerce lobbyist Ronald W. Wineholt said business and government should work together on a solution that includes state assistance for those who can't afford insurance, the creation of a competitive health insurance market and a requirement that individuals buy insurance.
The Wal-Mart law would not necessarily have reduced the number of uninsured in Maryland. It would have required all businesses with more than 10,000 employees in the state that dedicated less than 8 percent of their payroll to health care - effectively, just Wal-Mart - to increase spending to that figure or pay the difference to the state.
Before the law could take effect, the Retail Industry Leaders Association, a trade group of which Wal-Mart is a member, sued. It successfully argued in federal court in Baltimore and in the 4th Circuit Court of Appeals that the law violated the federal Employee Retirement Income Security Act, which prohibits states from regulating benefit plans.
Bill Kilberg, a Washington attorney who represented the retail industry association, said allowing laws like Maryland's would have hurt businesses.
"Nationwide, employers would end up with 50-some-odd different mandates, different plans, which would make any one of those plans far more expensive to provide than they are now," Kilberg said.
A Wal-Mart spokesman referred questions about the case to the association.
O'Malley, Gansler, and state Comptroller Peter Franchot, all of whom supported the Wal-Mart bill, made a pitch yesterday for more comprehensive solutions.
Labor, Licensing and Regulation Secretary Thomas E. Perez, who represented the O'Malley administration at the news conference in Gansler's office, said state officials will probably look to a plan like the one enacted in Massachusetts, which includes creation of a private insurance exchange, a requirement that individuals be insured, government help for those who can't afford coverage and a requirement that businesses help pay for the system.
"Massachusetts is certainly a state we will look at very, very closely," Perez said.
Many of the advocates who pushed for the Wal-Mart law turned their attention this year to a proposal to double the cigarette tax to $2 a pack to pay for expanding Medicaid eligibility to about 100,000 uninsured people.
That plan failed to pass in the recently concluded General Assembly session, but it could be resurrected in some form next year.
Vincent DeMarco, president of the Maryland Citizens' Health Initiative and one of the major backers of the Wal-Mart bill and the tobacco tax proposal, said a business requirement should still be part of establishing universal health care.
"We are here to stay," DeMarco said. "Fair Share is going to happen. We are going to make it a reality."