WAL-MART'S NEW LOW-PREMIUM, HIGH-DEDUCTIBLE CHOICE WORTH A TRY
November 7, 2005
As Americans confront higher health care costs during company enrollment periods this fall, or worry about losing coverage altogether, Wal-Mart is promoting a new choice that deserves better than the knee-jerk dismissal it has gotten from the company's critics, says USA Today.
- Wal-Mart's plan couples low premiums ($11 to $65 a month) with high deductibles.
- The first three doctors' visits and three prescriptions are handled with nominal copays.
- To help employees pay out-of-pocket expenses up to the deductible, Wal-Mart also promotes tax-free health savings accounts (HSAs), a kind of 401(k) plan for medical expenses.
Though no cure-all, Wal-Mart's approach is a worthy experiment that could be attractive to other companies struggling to expand coverage but control health expenses, says USA Today.
- Wal-Mart's health care costs have climbed 19 percent a year since 2002.
- To reverse the tide, Wal-Mart is thinking of moving its entire workforce into plans that include HSAs.
- It will match employee contributions up to $1,000; whatever isn't spent collects interest and belongs to the worker, even if he or she changes jobs.
For the concept to work, Wal-Mart must do more to educate workers about health issues and help them deal with the system's complexities. With its economic clout, Wal-Mart also hopes to create networks of health providers who deliver quality care at the best price. If there's anything Wal-Mart excels at, it's negotiating price with suppliers, says USA Today.
Source: Editorial, "Under fire, a giant employer offers a useful health plan: Wal-Mart's new low-premium, high-deductible choice worth a try," USA Today, November 7, 2005.
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