AFL-CIO backs bills requiring health benefits

Physician groups haven't supported these efforts on "pay or play" plans so far.

By Amy Snow Landa — Posted Jan. 23, 2006

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As state legislatures reconvene this month, the AFL-CIO and its member unions are preparing to battle Wal-Mart in state capitols over the issue of employee health benefits.

The AFL-CIO has announced plans to advocate in at least 30 states this year for legislation dubbed the "Fair Share Health Care Act," which would require large employers to contribute a certain percentage of their payrolls to health benefits.

In some states bills still are being drafted, but the minimum percentage generally ranges between 8% and 11% for private companies and slightly less for nonprofit employers.

Under the proposed legislation, employers that fall short would have to pay the difference into a state health care fund that subsidizes coverage for uninsured workers and their families.

The goal is to force Wal-Mart and other large employers to pay their "fair share" of workers' health care costs, said AFL-CIO President John Sweeney, who announced the campaign Jan. 5. As the largest private employer in many states, Wal-Mart would be the company most affected by the proposed legislation.

According to Sweeney, the retail giant has shirked its responsibility to provide affordable health insurance to its 1.2 million workers. This has forced Medicaid and other state-subsidized health programs to pick up the tab. "Why should a company like Wal-Mart, which made $10 billion last year alone, be able to force taxpayers to foot the bill for their health care costs?" Sweeney said.

Wal-Mart spokesman Nate Hurst said the company offers 18 health plans, with coverage available for as little as $11 per month for individuals. The legislation "does nothing to address the problem of the uninsured."

Physician groups wait and see

In several states where "Fair Share" legislation already has been introduced, the union-led effort has failed so far to attract much support from the medical community.

In Maryland, where the battle has been particularly intense during the past year, physician groups have tried to avoid the partisan crossfire.

"We haven't taken a high profile," said Michael Preston, executive director of MedChi, the Maryland State Medical Society.

In 2005, the Maryland Legislature overwhelmingly approved a measure that would require companies with 10,000 or more employees to pay at least 8% of their payroll toward health benefits. Gov. Robert Ehrlich vetoed the legislation in May on the grounds that it would have a chilling effect on the state's business climate.

After the veto, debate over the bill continued because it appeared there might be enough votes for an override. At press time, an override vote was expected by mid-January.

MedChi has not taken a position on this specific bill, Preston said. But it has adopted policy opposing any such "pay or play" bills that would mandate that employers either provide coverage or pay into a state health care fund. MedChi favors the AMA's position, which calls for establishing a system of individually owned health insurance that includes insurance market reforms and tax credits to assist people in purchasing coverage.

The Maryland Academy of Family Physicians also has not taken a position on the bill. The American Academy of Pediatrics' Maryland chapter considered endorsing the legislation but ultimately decided to oppose it.

Executive Director Deborah DiBona said the group's concern is that the bill singles out Wal-Mart, the only private employer in the state that has at least 10,000 employees and pays less than 8% of its payroll in health benefits.

She called that approach too narrow. Maryland pediatricians would like to see a more comprehensive attempt to improve health care access and strengthen Medicaid financing.

DiBona said the group planned to send a letter to state legislators before the override vote urging them to put aside the "Fair Share" bill and develop a broader proposal. Their hope, she said, is that "by not going after Wal-Mart at this point, we may have a chance to come back to the table and get a much better bill."

In states where similar legislation has been introduced, such as Connecticut, Michigan and Wisconsin, state medical societies say they have not yet taken a position.

But the AFL-CIO believes its campaign is gaining momentum. The debate in Maryland "has really energized legislators around the country and has given a new wind to these efforts at the state level," said Naomi Walker, AFL-CIO director of state legislative programs.

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External links

AFL-CIO campaign to pass "Fair Share Health Care" legislation (link)

Maryland's Fair Share Health Care Fund Act (SB 790/HB 1284) (link)

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