Friday, December 01, 2006

Response On Wal-Mart Drug Program and Health Insurance

In response to Shane Mason's comments on my post on the Wal-Mart prescription drug program I feel it important to respond to them in this post.

Andy, you should pick your heroes more carefully. Want a good example of the free market, look at Cosco. At least research a bit before puking out a press release verbatim. Here are some factoids for you.

I have done a lot of research on Wal-Mart. Interestingly, one of the most informative documents I have found is called "Wal-Mart: A Progressive Success Story" written by Jason Furman who was an economic advisor to the Kerry Campaign. I don't always rely on conservative information.

I think Costco is an outstanding company that provides great pay, benefits, and opportunities. Their business model is very successful.

1. There are NOT 331 drugs, there are 123 drugs at verying dosages.

It's actually 143 different drugs in 331 different versions and dosages. I don't see this as being a big deal as this information is easily available on Wal-Mart's web site.

2. American Taxpayers spend over 9 BILLION each year on healthcare costs for Walmart employees as they choose to have over 775,000 employees without healthcare. Now, if they were the shining example of the free market that you want them to be, wouldn't they be offering health care to their employees. If that isn't how it is supposed to work, then how?

According to Furman's paper, Wal-Mart offers health insurance to both full and part-time employees where only 60% of firms economy wide offer health benefits and only 17% offer health benefits to part-time workers.

Wal-Mart also pays 70 % of the cost of benefits which is similar to the retail industry. More Wal-Mart employees are eligible for health insurance than in the retail sector as a whole and even slightly more than the nationwide total. Even though the company pays 70% of the cost only 48% of their employees have health insurance. This is compared to 46% in the retail industry.

Wal-Mart has 548,000 employees on the insurance which covers 948,000 people. 34% of Wal-Mart employees are offered health insurance but choose not to enroll, because they are already covered by a family member, choose to be on Medicaid rather then pay their portion of the premium, or choose not to have health insurance.

Finally, they have comparable deductibles to other PPO plans and are one of few companies that have no lifetime maximum for coverage.

3. You get one more for free, after that I am going to make you do your own research.

Wal-Mart’s List Includes Only 1 Percent of Generics on the Market, Less than 10 percent of Commonly Stocked Generics. The New York Times reported that more than 11,000 generic drugs are currently on the market, and other large pharmacies routinely carry more than 3,000 generics on their shelves. The number of drugs in the Wal-Mart program, which the company misleadingly represents as, “as 143 compounds,” represents only a tiny percentage of these numbers. [New York Times, 9/22/06; Generic Line, 10/4/06; Wal-Mart release, 10/19/06; News Observer (NC), 9/23/06]

Throwing out these huge numbers of generic drugs that are on the market means very little. Most are not commonly prescribed or dispensed. What is important and far more meaningful is that the $4 program is on a full 25% of the generics that Wal-Mart dispenses.

Relying on "research" from a anti-Wal-Mart group such as Wake Up WalMart is unreliable and biased.


  1. Checkmate. Way to go Andy. Regan said it best, "The trouble with our liberal friends is not that they are ignorant, it is just that they know so much that isn’t so."

  2. First, I am flattered that you gave a whole post to me. As you should be flattered that you actually have a fan-boy in Ryan.

    OK, here goes:


    It's actually 143 different drugs in 331 different versions and dosages. I don't see this as being a big deal as this information is easily available on Wal-Mart's web site.

    That is not what it says in your post or the articles that you reference. If that is the case, then say it. Don't obfuscate the truth.


    On Wal Mart's health care, if their model is so damn good then why do they have 775,000 employees without healthcare, costing the American Taxpayer for OVER 9 BILLION? Could it be that the numbers that Wal Mart posits simply are not true? Could it be that the value 'healthcare plan' that they offer to lower earning employees is not worth having? Could it be that this magic plan costs $10 per week and has a $1000 per year cap? That is not a plan Andy, it is a joke. Here are some real facts for you on their other options:

    *Between 2000-2005, the cost of premiums rose 169 percent for single coverage and 117 percent for family coverage.
    *The average worker would have to pay one fifth of his paycheck for health care coverage at Wal-Mart. On a wage of about $8 an hour and 29-32 hours of work a week, many workers must rely on state programs or family members or simply live without health insurance.
    *Employees must pay $218 per month for family health care coverage from Wal-Mart.
    *In Wal-Mart's employee health plan, deductibles range from $350 to as high as $3,000 for family coverage.

    Relying on "research" from a anti-Wal-Mart group such as Wake Up WalMart is unreliable and biased.

    The simple fact is that according to Wal Marts OWN memo:

    In 2004, 38 percent of enrolled Associates spend more than 16 percent of the average Wal-Mart income on healthcare. … In total, 46 percent of Associate’s children are either on Medicaid or are uninsured.

    Again Andy, you have been found wanting.

  3. I like how liberals demand that we have programs like Medicare and Medicaid, then get upset when people us them. When these programs only pay hospitals pennies on the dollar people with private insurance like Walmart employees have to make up the difference. My grandma just had a $3500 surgery. Medicaid only paid $500. Who do you think paid the other $3000? A lot of it came from the premium hikes Wal-Mart had to put on its employees (because of liberal policies). Instead of the government spending 9 billion in the most inefficient ways possible, how about giving the money back to the people in the form of health saving accounts so they can choose how to spend it best. The lesson to the story: Anytime government pokes its nose into people business they make things worse. Liberals say they are compassionate, but they actually hurt those they say they help.

  4. Ryan,

    THose programs are for people in dire need buddy and not really intended for people who have full time jobs.

    Stick with it homes. You can tell an awesome site when it has a following of one.

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  6. Mr. Lefty,
    This is another example of good liberal intentions but terrible results. If these programs are just for those with dire needs, why is almost every senior citizen on the program? Before I am called cruel, of course I think we should help the needy. The problem is that government has no ability to differentiate the needy from the un-needy, so we get get big harmful programs .

    It may have started by trying to help just those in dire need, but liberalism has warped into a powerful system that hemorrhages money, tells doctors how to treat people, prompts sub par treatment, and pays pennies on the dollar. Most doctors hate these programs. The answer is in more choice and free market. Things like seniors picking private insurance plans and health savings accounts will do much more good with less money. The problem is private programs remove power from liberals.

    Buy the way, WalMart (there’s more) has done more to raise the standard of living in this country than all the liberals combined. In a sane world liberals would praise such a company not tear it down.

    "Following of one" Nice cheapshot, thought libs were "kind and compassionate" other words…grow up so we can have a civil discussion.

  7. There is just too much information to defeat Shane’s arguments…I just can’t stop commenting. Thanks Andy. Lets say liberals had their dream and Wal-Mart decided to spend 9 billion more on health insurance. Given there profit is about 10 billion each year; they then have much less money to reinvest, their stock holders sell like crazy, they have to raise prices, and close stores. What follows are mass layoffs and higher priced goods, which will mostly harm the poor...but liberal will be ecstatic. Not everyone can have the Costco model. They pay well, but they also only hire people top-notch employees. My brother was late twice and had a bad attitude so Costco laid him off, but my cousin works his butt off and is very happy at Costco. Not everyone has the desire or ability (senior citizens, part-time mothers who want flexible hours) to meet Costco standards and WalMart fills that bill nicely. Again before I am called cruel WalMart has a lot of amazing employees, and I suggest they go apply at Costco.

    By the way business providing health insurance is a Bad idea.

  8. Shane,
    What do you want Wal Mart to do? They are a retailer and as such, pay retailer wages and offer retailer benefits, both of which are above average in the industry.

    Wal-Mart does a much better job helping low and middle income Americans than the government ever could. This is why you Liberals hate them.

    Healthcare benefits are just that, a benefit. Take it or leave it. Companies aren't obligated to provide health care benefits, they provide them to attract and retain employees.

    I am also flattered that you enjoy insulting me. I must be getting under your skin a little.

  9. Unfortunately for Liberals, people vote with their dollars. Wal-Mart has become successful though the support of their customers and their employees.

    If they were the horrible company that Liberals make them out to be, people would not longer shop there or want to work there.

    They don't seem to have a problem with either.

    I want to thank my single fan, Ryan for your support and excellent comments!