Wal-Mart Affordable Health Insurance Program: Shorting the Employee?

As the U.S. shifts to a part-time work force with no health insurance, those with health insurance and tax payers cover the health care costs of the uninsured. According to the US Census Bureau, the share of Americans covered by health insurance at work decreased to 59.8 percent in 2004, from 60.4 percent in 2003. Medicare growth and work force trends promise to lower the portion of the work force with employer-paid health insurance to below 50% by the end of the decade.

Retailers aren't the only ones driving this trend. But this week, Wal-Mart's Sam's Club, a leading supplier to small businesses, announced a program that could increase the number of uninsured. Called ExtendChoice(TM) (www.ExtendChoice.com), Sam's Club is marketing individual health insurance plans to small businesses instead of group health plans because, they say, it is a "Fact: Individual policies cost ¼ to ½ the price of a typical group policy for similar coverage."

"Individual and group policies are NOT the same," says Mike Chapman of www.BenefitsBoutique.com, a nationwide insurance firm specializing in affordable health insurance for individuals, the self employed and small businesses. "Individual plans don't cover maternity in most states, so who pays for all of those babies born to employees without the maternity benefits? And what happens to employees that are part of "the 1/5 of individual policy applicants" that Sam's ExtendChoice(TM) website admits "can't get individual insurance because they (or someone in their family) have an expensive preexisting medical condition?" Following Sam's own logic, 20% of small business employees would be uninsured.

"The employee loses." says Chapman. "And the tax payer picks up the tab." BenefitsBoutique.com offers both individual and group medical insurance plans, but doesn't sell individual health insurance plans to businesses for ethical reasons. He admits, though, that the price savings from individual plans is compelling. "Small business owners rarely know the health or family planning issues facing their employees' families. Small businesses that replace a group medical insurance plan with individual health insurance policies might save a buck but could jeopardize the health of their employees' families and their financial well being."

What are small businesses and the self employed to do about rising health insurance costs? Chapman cites the Bush Administration's call for passage of Association Health Plans (www.AssociationHealthPlans.com) that allow small businesses to combine their insurance purchasing for better rates, and creation of tax incentives for individuals and businesses with health insurance as a better solution.

But Congress has been slow to act. "Maybe this exploitation of the inequities between individual and group health insurance by a major retailer will finally cause legislators to wake up," says Chapman.


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This release was published on openPR.