Maryland's Wal-Mart Law
Maryland recently passed a law requiring employers with more than 10,000 employees in the state to spend 8 percent of their payrolls on health care. Ostensibly, the goal is to reduce the number of workers in Maryland from needing to rely on Medicaid. So how many employers does this effect? You guessed it. Only one. Wal-Mart.
Although some might view Wal-Mart as the evil empire and some might suspect that my residency in Target's home state of Minnesota would pretty much require me to be one of those who view Wal-Mart as the evil empire, I do not. Like any corporation, Wal-Mart is in business to legally earn as large a profit as it can. Is forcing Wal-Mart to pay a higher percentage of its payroll on healthcare a good idea? Read on and I'm hoping that you'll agree that isn't really the point.
Clearly it is in the State of Maryland's best interests to minimize the number of its citizens who must rely on Medicaid. By reducing those counts, Maryland saves money and hopefully improves the quality of care available to its citizens. So if the goal of this law is solely to save Maryland money and move its citizens from Medicaid to private insurance, then why was it written to only ensnare Wal-Mart and not other companies? Surely the State of Maryland is concerned about its entire Medicaid budget, not just the portion of its budget tied up in providing benefits to Wal-Mart employees. And those of its citizens who are Wal-Mart employees. And surely the State of Maryland is concerned about all of its citizens, not just those who work for Wal-Mart. Some might say that small employers can't afford to pay healthcare costs. But even if that is true, is Wal-Mart the only large organization in Maryland. Of course not. Is it the only organization that can afford to pay for healthcare for its employees? Of course not. Is it the only organization that can be accused of not paying enough of the healthcare expenses for its employees? Of course not. So what is the point of the law?
Quite simply, the Maryland legislature understands economics enough to know that it should not attempt to impose healthcare costs on employers doing business within Maryland because those added costs will result in lower employment within Maryland. Businesses in Maryland do not exist in a vacuum. If their costs are higher, consumers will buy less and the employers will need fewer employees. Yet the legislators also know that Wal-Mart is, unfortunately, a favorite whipping boy right now. So the legislators can impose these costs on Big Bad Wal-Mart and win votes and favors from many quarters. They may be short-sighted enough to impose such an uneven law on Wal-Mart, but they aren't stupid enough to impose it on all businesses or even most large businesses in Maryland.
If Maryland really wanted to reduce the number of employed workers on Medicaid, then it could and should have tightened the eligibility standards for Medicaid. Maryland could simply have created a law stating that those making as much income as Wal-Mart provides its workers would be ineligible for Medicaid benefits. While the wisdom of such a law would still be open to debate, at least it would be fair as it would apply to workers at all organizations and not just those who work for Wal-Mart.








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