WAL-MART PLEADS ITS HEALTH CARE CASE TO STATES

KRISTI ELLIS

WASHINGTON - H. Lee Scott, Wal-Mart Stores' chief executive officer, has unveiled details of the company's expanded health care coverage, acknowledging the company can do better and that challenges lie ahead.

"Wal-Mart is stepping up with solutions to the health care challenges facing America's working families," he said in a speech to the National Governors Association here last week. "We're making health care more affordable and accessible to our associates. And with the [additional] clinics, we're using our business strengths to do the same for our customers and our communities. That's what Wal-Mart can do, but we cannot do it all. No business can. No business should have to."

While he emphasized the health care debate is a national crisis, he acknow-ledged the company can do a better job in providing benefits.

"We know our benefits at Wal-Mart Stores are not perfect. Do we want more of our associates' kids on our health plans? Of course, we do. But have many states made their Medicaid programs far more generous in order to cover the kids of working families? Yes, they have. Are you right to want to make sure that the kids of working families have health coverage even if it's Medicaid? You bet you are."

Labor unions claim Wal-Mart's policies shift the burden of providing health care onto the public, citing the number of Wal-Mart workers and their families who receive government-funded medical assistance. The retailer is the target of bills in 22 states that would force it to spend more on employee health care.

A key part of Wal-Mart's plan is increasing its number of in-store health clinics from nine to 50. The retailer is partnering with third-party vendors to add drop-in health clinics to select stores nationally that will provide basics such as flu shots, based on a pilot program in its northwestern Arkansas stores that has done well, according to the company. Each visit would cost employees $45 to $50.

Scott reiterated in his remarks that Wal-Mart plans to expand the availability of its low-cost health plan and allow part-time workers to insure their children.

The world's largest retailer plans to extend its coverage to at least half of its U.S. employees with an $11-per-month Value Plan option, a low-cost health care plan it introduced in 2005, which exchanges inexpensive premiums and three free doctors' visits for higher deductibles. In addition to allowing part-time employees to insure their children, the company will shorten the mandatory waiting period before an employee becomes eligible to join the plan. The current waiting period is six months for full-time employees and two years for part-time workers among Wal-Mart's 1.6 million global workforce.

Wal-Mart Watch, a group that recently disclosed an internal Wal-Mart memo suggesting the company reduce health care costs by discouraging unhealthy workers from applying, is skeptical of the new plan.

During the question-and-answer session at his presentation, Scott said it is becoming increasingly more difficult for American companies to compete on the global front. "The thing I'm worried about the most as I travel internationally and [as] I think about the global competitiveness of this country, that's what bothers me with the direction we are going in with health care."

Scott asked how "can we compete in a global economy against companies in other countries that don't even provide health insurance or ones that provide it at a lower cost than the U.S. does?"