- The Washington Times - Sunday, February 26, 2006

With at least a dozen states considering legislation that could force Wal-Mart Stores Inc. to spend more on health care, the retail giant’s top executive yesterday urged governors to resist such union-backed bills.

“I believe we’re seeing a little too much politics,” Wal-Mart chief executive Lee Scott said at the annual winter meeting of the National Governors Association.

“By requiring companies to spend an arbitrary percentage of their payroll on health benefits, these bills discourage companies from offering quality health care at a low cost,” he said.

Wal-Mart critics say the company, which employs 1.3 million, spends so little on health care that states often end up subsidizing Wal-Mart workers’ medical care.

On Friday, the Ohio Department of Job and Family Services released records showing that last year Wal-Mart ranked No. 1 in the state, with more than 12,000 of its workers and dependents getting $27.7 million from Medicaid, the health insurance program funded by state and federal governments.

On Thursday, Wal-Mart announced it would expand coverage for its employees and build more than 50 in-store health clinics to offer customers and workers medical services for $45 to $65. Wal-Mart operates 3,800 stores in the U.S.

The nation’s largest private employer has been scrambling to stop states from passing laws similar to the Fair Share Health Care Fund Act, which the Maryland General Assembly passed in January over the veto of Gov. Robert L. Ehrlich Jr., a Republican

Maryland now requires companies with more than 10,000 workers to spend at least 8 percent of payroll on health care, or pay a penalty to the state’s Medicaid program. Wal-Mart, with nearly 17,000 workers in Maryland, is the only company affected.

The Retail Industry Leaders Association, representing Wal-Mart and other major retailers, is challenging the Maryland law in federal court.

But that has not discouraged lawmakers in other states from introducing similar bills. Unions are strong backers of the legislation.

Mr. Scott said such bills “may score short-term political points, but they won’t solve America’s health care challenges.”

He pledged to “travel to any state capital to talk with any governor” about steps that states and business could take together to try to drive down high health care costs. “We have common goals,” he said.

The governors’ four-day gathering, which ends tomorrow, is being headed this year by Gov. Mike Huckabee, Arkansas Republican. Wal-Mart is based in Bentonville, Ark.

Mr. Huckabee focused on the theme “Creating Healthy States.” Sessions at the governors conference explored ways that states can help their residents to eat healthier foods and exercise more.

In response to questions from governors, Mr. Scott said he sees value in President Bush’s health savings accounts. The accounts provide tax breaks for people who save for their own health care, but Mr. Scott said he finds the program “too complicated” to be helpful to most workers.

Wal-Mart has not released details of its health care expansion effort but said it would make far more workers eligible for the Value Plan, its lowest-cost health plan. The plan, which in some locations costs as little as $11 a month for employees and 30 cents more a day for children, will be made available to at least half of all workers.

The company also will be reducing the waiting period for part-timers to qualify for coverage and allow their children to be covered.

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