Health-care fix will require cooperation, Wal-Mart chief says

WASHINGTON — Wal-Mart CEO Lee Scott told a gathering of the nation's governors Sunday that although the company plans to expand its health-benefits program to cover more workers and their families, the country's health-care crisis cannot be solved by Wal-Mart alone.

"The soaring cost of health care in America cannot be sustained over the long term by any business that offers health benefits to its employees. And every day that we do not work together to solve this challenge is a day our country becomes less competitive in the global economy," Scott said.

The move comes as the country's largest employer has faced proposals in about 30 state legislatures, including Washington's, that aim to require large businesses to dedicate money equal to certain percentages of their payrolls to pay for health insurance for workers.

Maryland is the only state that has passed such a bill so far.

In Olympia, Washington state's bill would have required companies with more than 5,000 workers to devote an amount equal to 9 percent of their payrolls to health benefits or pay the difference to the state for taxpayer-funded health programs. The proposal died earlier this month.

Gov. Christine Gregoire said the intentions Scott expressed in his speech were encouraging, but that Washington can't afford to subsidize health care for Wal-Mart's employees, mostly through the state-supported Basic Health Plan or Medicaid, the federal-state health program for the poor.

"The fact that we've got a large employer that's got 20 percent of its people getting health-care insurance through the taxpayers cannot be allowed to stand," she said after the speech.

More than 3,000 of the 16,000 Wal-Mart employees in Washington were benefiting from public health-insurance programs for low-income people in 2004, a state report estimated. The figure was disputed by the company as outdated.

Scott said the retail giant intends to reduce the waiting period for health insurance for part-time employees and extend its "value plan," which allows employees to buy basic coverage for $11 a month, beyond the handful of markets in which it is available now. The company also will give part-time employees the option of insuring their children as well as themselves.

Scott said his company's health plans aren't perfect but called employer-mandate bills politically motivated and unrealistic. The bills have been driven by support from organized labor, long critical of Wal-Mart, which has successfully fought efforts to unionize its stores.

Gregoire said she sat down with Wal-Mart representatives last month before the bill — dubbed "Fair Share Health Care" by supporters — died in the Legislature. She said she will continue to work with the company if it is serious about providing its employees with quality health coverage.

However, state officials are working to craft a health-care-coverage solution that "tackles the whole system." And that solution must "level the playing field" for large employers who say they have to slash benefits to compete with Wal-Mart, as well as address small businesses that can't afford to insure employees, Gregoire said.

"We're going to work over the course of the year to find the best solution, and that may not be a fair-share bill. It may be a different kind of solution," she said. "I don't think it's 'one shoe size fits all' for the nation."