Fair Share Health Care: Its Time Has Come

By Senator Jeanne Kohl-Welles

As health-care costs continue to spiral, increasing at two to three times the rate of inflation — and with the state picking up more of the tab — it’s time we put a stop to corporate welfare.

That’s why I introduced Senate Bill 6356. SB 6356 would level the playing field by requiring employers of 5,000 or more employees (full-time and part-time) in Washington to spend 9 percent (for-profit business) or 7 percent (nonprofits) of their payroll on health-care coverage or pay the difference to the state Health Services Account for public coverage programs serving the uninsured.

The need for legislation is indisputable.

Fewer employers are providing health care for their workers. Five years ago, 7 out of every 10 employers offered coverage. Today, it’s only 6 out of every 10 employers who offer coverage.

This erosion in private-sector coverage is one of the primary reasons that the number of uninsured in the U.S. has increased to 46 million, which is 5 million more than were uninsured just 5 years ago. In Washington, it is staggering to think that 600,000 people don’t have health care coverage.

In addition to declining coverage in the private sector, state spending on health care is going up at unsustainable rates. Our state spent nearly $4 billion on health care last year, nearly twice as much as the state spent only five years ago. Today, 28 percent of every dollar spent by the state now goes to health care.

One factor that is driving increases in state expenditures is that the workers of some employers and their dependents, including children, are being covered through taxpayer-financed programs.

Senate staff released a report this week, using data from the state Office of Financial Management, on how much the state is spending on health care costs for some of the state’s largest employers.

That report underscores this urgent and growing problem. The numbers tell us why it’s imperative that the Legislature act now to stop some of our largest corporations from shirking their responsibilities and passing on health insurance costs to the taxpayers.

That report estimates that Washington spends $11 million a year, or $22 million per biennium, in Medicaid costs for just one of the state’s largest employers alone.

By comparison, for $18 million over one biennium, the state could fund over 10,000 new enrollments in the Basic Health Plan. In addition, approximately 20,000 children could receive health care coverage under the Children’s Health Initiative Program.

It is unfathomable to me that the world’s largest employer, Wal-Mart, does not pay for the health care of a large number of its employees. Yet, it reported $312.96 billion in revenue in 2004.

Let’s be clear that Senate Bill 6356 and its companion bill, House Bill 2517, do not vilify one company (Wal-Mart), but apply to all employers – public and private – having 5,000 or more workers. Indeed, Wal-Mart has received the most attention on this issue as the number one abuser of our health care system.

Recently, K-Mart announced that it’s cutting back on full-time employees to save money. It’s struggling to stay competitive with another giant who isn’t playing by the same rules. Other companies take the fiscally and socially responsible action of paying for the health care of their employees. Costco, Starbucks, Brown and Cole, Frank Russell, and Red Lion Hotels are just some of the many companies in our state that do their fair share for their employees.

But when their competitors don’t, and rely upon the taxpayers – that’s you and me – to pick up the tab, those who are playing fair are penalized. From what I understand, this has already happened with some of our major and important employers, such as Safeway and Fred Meyer.

Can we blame them when they otherwise are increasingly less competitive with similar businesses?

This isn’t just about corporate responsibility or fairness. It’s about making sure that the health-care needs of employees are taken care of – and not with some corporation’s hand in your pocket and mine.

If all corporations did the responsible thing – and most do – we wouldn’t need this legislation. But when corporations aren’t responsible, taxpayers and other corporations are stuck with the bill. It’s time we change that.

It’s time to stop shifting the cost to taxpayers. And it’s time to stop penalizing the many companies already paying their fair share who remain at a competitive disadvantage unless they enter the “race to the bottom” by converting positions to part time and reducing employee health-care coverage.

A number of business leaders support SB 6356 and HB 2517, because they are pro-business. The legislation would stop large employers from abusing the system, which would have the effect of not only draining our state budget but also forcing all of us to pay higher insurance premiums to cover the uninsured in our state. For businesses, that means they carry higher costs in taxes and premiums because of cost-shifting.

This legislation isn’t the sole answer to curbing our rising health care costs, but it’s one thing that can be done.

It’s more than time.

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