Yet financial pressures on insurers continue to increase premiums and potentially squeeze reimbursement rates for clinical laboratories and pathology groups
Walmart shoppers expect to find low prices on the retailer’s shelves, but the discounter’s full-time employees may be surprised to learn their company healthcare plan is also a low-cost leader. This is a significant finding and is significant for pathologists and clinical lab managers because the Walmart health benefit plan includes an expanded provider network, at a premium that is about half of the subsidized rate for a comparable health plan at Healthcare.gov.
A Washington Examiner analysis comparing Walmart’s employee health insurance program with Obamacare—more formerly referred to as the Patient Protection and Affordable Care Act (PPACA) or simply the Affordable Care Act (ACA)—found that “Walmart’s plan is more affordable and provides significantly better access to high-quality medical care than Obamacare.”
The report also noted that Walmart’s participation in a national healthcare network means employees typically choose from a list of participating providers and high-profile hospitals that dwarfs the number of options on Obamacare exchanges.
Independent Health Insurance Examiners Find Walmart’s Health Plans Superior
According to the Washington Examiner’s report, Walmart offers its employees the choice of two plans that are managed by Blue Cross Blue Shield:
1. A Health Reimbursement Account; and
2. An “HRA High,” which features similar coverage, but with higher out-of-pocket expenses and lower deductibles.
Walmart also offers its employees a Health Savings Account plan that includes high deductibles but allows tax-free dollars to be used to pay for coverage.
The Washington Examiner’s article cited several examples of Walmart’s health plan price superiority:
• For a family of four with an annual income of $53,000 per year, Walmart’s monthly premium is $160 compared to a subsidized rate of $317 or an unsubsidized rate of $962 on HealthCare.gov.
• A 30-year-old smoker with a $30,000 income pays $70 per month under the Walmart plan versus a $352 subsidized premium or $428 unsubsidized premium under Obamacare.
• Two 60-year-old nonsmokers with a $25,000 income pay a $134 monthly premium under the Walmart plan compared to a $94 subsidized premium or a $1365 unsubsidized premium on HealthCare.gov (the only comparison showing mixed results).
The report did not detail any differences in the deductible amounts between the various plans. Independent insurance agents affiliated with the National Association of Health Underwriters (NAHU) and health policy experts compared the plans at the Washington Examiner’s request.
“It’s a lot better program than people, I think, might assume without looking, just because Walmart has gotten such a bad reputation by some of the labor groups and other groups for its general activities,” stated Gail Wilensky, PhD, in the Washington Examiner article. Wilensky was head of the Healthcare Financing Administration (HCFA) under President George H.W. Bush. The HCFA was the predecessor to today’s Centers for Medicare and Medicaid Services (CMS).
Eight ‘Centers of Excellence’ Included in Walmart Plan: Not Offered in Obamacare
Beyond the price differences, the Washington Examiner also pointed out that the Walmart plan offers a broader network of hospitals, including eight “Centers of Excellence” such as Mayo Clinic and Cleveland Clinic , which are not part of most Obamacare exchange plans. This is a notable finding, because pathologists working in academic centers are often excluded from the narrow networks of the health exchange plans offered by many private payers. That is not the case under the Walmart health benefit program.
“It’s not just the number, but who they are,” health policy advocate Betsy McCaughey, PhD,, a former New York Lieutenant Governor, told the Washington Examiner. “You’ll find under the Obamacare exchanges that the academic hospitals have declined to participate, along with the specialists who practice at those hospitals. The same is true of cancer hospitals.”
Part-time Employees Not Offered Coverage by Walmart
Yet the news is not all good. A large portion of Walmart’s employees–its part-time workers—do not qualify for health coverage. In fact, the Washington Examiner’s positive analysis of Walmart’s health plan was followed in October, 2014, by news that the retailer was cutting health benefits for its 30,000 workers who work fewer than 30 hours a week and raising full-time worker premiums by 19%.
“If a retail empire built on low prices can’t find a way around Obamacare’s added costs, we’re all doomed,” stated an Investors Business Daily editorial.
That decision by Walmart coincided with the Affordable Care Act’s January 1, 2015, deadline requiring large employers to provide subsidized healthcare for every employee who works 30-hours a week or more.
Need for Tough Decisions Due to Affordable Care Act Mandates
The part-time workers that make up about 2% of Walmart’s 1.3 million-person workforce are eligible to enroll in state and national healthcare insurance exchanges and may be eligible for government subsidies that reduce their premiums. How well that turns out for those workers is up for debate.
“Walmart’s insurance appears to be pretty cheap, and while it has a high deductible, that deductible is comparable to, or better than, many of Obamacare’s ‘bronze’ plans,’” wrote Bloomberg View’s Megan McArdle. “The out-of-pocket maximum is higher, but the Walmart plan seems to have included a variant of a health savings account, which workers won’t get on the exchanges, and most workers won’t approach the out-of-pocket maximum. If the part-time workers are earning very little, they’ll get a nice big subsidy. But how many people are supporting themselves entirely on part-time work at Walmart? If they have other family income, this may turn out to be a substantially worse deal.”
Several Big Companies Dropped Health Insurance Coverage for Part-time Staff
As Forbes pointed out, Walmart is not the only high-profile retailer to cut health benefits for part-time workers. Home Depot, Target, Trader Joe’s, Forever 21 and other large retailers also ended health insurance coverage for part-time staff as Obamacare went into effect.
Carrie Gleason, Director of the Fair Workweek Initiative , a grassroots effort to achieve an equitable workweek for today’s workforce, criticized the retailers for forcing taxpayers to subsidize an employee benefit that they “can more afford to pay.”
“The real issue at play here is that employers consistently don’t offer part-time employees health insurance,” Gleason told Forbes.
Clinical Lab Executives May See Next Congress Tackle Healthcare Costs
Notwithstanding the ongoing controversy about the good and bad aspects of the Affordable Care Act, the Washington Times report provides evidence that the private marketplace can deliver health insurance options that offer patients access to a larger provider network at significant savings compared to comparable plans offered through HealthCare.gov. Medical laboratory executives and pathologists should keep this in mind as they watch the next round of Obamacare mandates push even more people insured by their employers into the health plans offered through the health insurance exchanges.
In addition, news reports about the substantial increase in premiums for 2016 for health exchange insurance plans in many states can be seen as a sign that, in its sixth year as law, Obamacare has failed to achieve its stated goal of an overall reduction in healthcare costs across the American healthcare system. That may turn out to be a problem that must be tackled by the next Congress and president.
—Andrea Downing Peck
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