A couple of thoughts on Walmart’s decision to stop offering employer sponsored health insurance for part time workers effective 1/1/15.
- This is an obvious money saving move for Walmart as it gets them off the hook for some premiums.
- For part time workers who live in Medicaid expansion states and make approximately average Walmart wages this is an unmitigated big win. Sarah Kliff at Vox explains:
A small minority of part-time workers are currently offered health benefits at their company. ADP Research Institute estimated in 2013 that about 15 percent of part-timers had the chance to buy into their company plan. And, perhaps even more interesting, only about half of those who had the opportunity actually bought the coverage…
Obamacare has introduced a new and big drawback to the employer insurance. Namely, anybody who gets access to affordable coverage at work is barred from getting subsidies through the new exchanges. This is even true for people who don’t buy insurance at work; just the act of getting offered employer coverage blocks individuals from using getting financial help.
That financial help can be a big deal for those with lower incomes. Think of the 36-year-old Walmart employee here in Washington, D.C. who works 29 hours per week at the company’s average wage of $12.73 per hour. She earns just about $19,000 annually if she works every week of the year.
If Walmart doesn’t offer her insurance, the Kaiser Family Foundation’s subsidy calculator shows that she qualifies for a $1,751 subsidy from the federal government to help buy coverage on the exchange. With that financial help, she can buy insurance for as little as an $7 per month…. Walmart’s plan, meanwhile, is way more expensive. The average premium there works out to $111 per month.
You have to do some adjusting for plan characteristics as the basic Walmart plan is most likely not a Bronze plan, so like to like premium comparisons will be adjusted up a bit. But like for like in plan characteristics will have Exchange eligible individuals significantly better off in most states. And for Walmart part timers with near average Walmart wages but larger families, they become Medicaid eligible which is no premium in most states and low premium in the waiver states.
- Walmart workers who earn less than 100% FPL in non-expansion states are fucked as they lost their employer sponsored healthcare and can not get on Medicaid expansion and can not get subsidies on Exchange. If they were already buying Walmart health insurance, they are probably sick, so they probably would have been looking to get Gold or Platinum coverage on Exchange which is now incredibly unaffordable. Fuck you Chief Justice Roberts et al.
- Walmart’s full time workers should see their risk pool get significantly healthier and thus cheaper. The part timers who were taking up Walmart ESI were probably sicker on average as that is the only case when a employee contribution towards premiums of $1,500
5,000or more per year would make sense is if they knew they were going to have big claims due to general ill health, age, or chronic conditions. The Exchanges and Medicaid act as a defacto high risk pool for Walmart now.
- Exchange subsidies go up but people are less tied to their employers for insurance — this is how the future will be, so we should see this type of logic happen at almost all large, low wage employers in the next two or three years.