Proposition on Company Health Coverage Waits on California Ballot

November 1, 2004 ( - When California voters go to the polls Tuesday, choosing a President won't be the only choice on their minds.

Along with the Kerry/Bush choice, Proposition 72 is also on the ballot. The measure relates to whether California should force large companies such as Wal-Mart to either provide affordable health insurance for their workers or pay into a state health insurance pool.

The New York Times reported that Wal-Mart employees without company-sponsored health insurance are costing the Golden State’s health care programs $32 million each year. Other large companies, who often have six-month periods or longer for employees to wait before being insured, do the same thing. Wal-Mart, however, seems to be the focus for Proposition 72 supporters.

Supporters cite polls such as a recent one in Georgia which found that more than 10,000 children of Wal-Mart employees were in the state’s health program for children at an annual cost of almost $10 million. In North Carolina, a hospital found that 31% of 1,900 patients who described themselves at Wal-Mart employees were on Medicaid. Sixteen percent had no insurance at all, the Times reported. .

Foes argue that forcing large companies to either provide insurance or pay the state will eventually cause a loss of jobs. Governor Arnold Schwarzenegger is one opponent who supports the hard economic view, and he is joined, not surprisingly, by many large retailers and restaurants that would be affected by the move.

Wal-Mart itself asserts that its employees are generally insured. It disputes the California figures and claims it cannot verify the Georgian and South Carolinian numbers, the Times reports. It claims that 90% of its employees have insurance through the company, Medicare, parent’s policies, or through second-job coverage. The company claims that it spent $1.3 billion – of a total of $256 billion in revenue in 2003 – on employee health care coverage, and insured approximately 45% of its workforce. Twenty-three percent of Wal-Mart employees are not eligible for health benefits, the Time reports, but it covers 58% of those who are eligible.

The retail giant has been running a national ad campaign in hopes of fending off such legislation from becoming common. The company has reportedly spent $500,000 in California alone in hopes of defeating the proposition. A group in California who supports the proposition, responding to the Wal-Mart ads, has actively publicized the plight of some employees without health care.

The issue of uninsured employees is a national issue, a spokesperson for Wal-Mart says. “You can’t solve it for the 1.2 million associates if you can’t solve it for the country,” Susan Chambers, executive vice president for Wal-Mart told the Times.