In Maryland, there are four private employers with more than 10,000 workers. Three of the four spent at least 8% of their payroll on health insurance. The fourth is Wal-Mart.
With this in mind, state lawmakers passed a law that didn’t mention the behemoth by name, but would have required any company with exactly these characteristics to either spend more to cover health care expenses of its employees or pay more into Maryland’s Medicaid program. Gov. Bob Ehrlich (R) vetoed the measure passed Maryland’s General Assembly. Thursday, Democrats overrode the veto.
Maryland lawmakers bucked the will of the state’s Republican governor and the nation’s largest retailer yesterday, voting to become the first state to effectively require that Wal-Mart spend more on employee health care.
In a veto reversal that was closely watched nationally, lawmakers in the Democrat-led General Assembly voted largely along party lines for a measure that legislatures in more than 30 states are considering replicating.
“Maryland is not a shrinking violet — no, far from it,” said Sen. Gloria G. Lawlah (D-Prince George’s), a lead sponsor of the legislation, which drew strong backing from labor unions and health care advocates. “Maryland is a leader. Let us light the torch today. Let us lead.”
The Senate voted 30-17 for the bill after a filibuster attempt by Republicans. The House followed last night with an 88-50 vote that handed Gov. Robert L. Ehrlich Jr. (R) a defeat early in the legislative session on a bill he argues is an unwarranted government intrusion into business.
Wal-Mart pulled all the stops to lobby as hard as possible against this, and considering the company at hand, it’s easy to imagine the scope of the effort. Lawmakers didn’t care. Good for them.
Of course, the company fought this for more than just the obvious reason. Now, Wal-Mart has to worry about other states that were watching the outcome of the Maryland fight. Lots of other states.
Maryland’s bold new law requiring Wal-Mart and other large companies to increase health care coverage of their workers has given new life to supporters trying to pass similar legislation nationwide.
The state’s Legislature on Thursday passed a law that directs firms with more than 10,000 employees to spend at least 8 percent of their payrolls on employee health benefits. The law targeted Wal-Mart, the world’s largest retailer, whose low pay and scant benefits have drawn widespread criticism.
In at least 30 other states, plans are under way to draft and introduce similar “fair share” laws. A proposal in Rhode Island would require companies with 1,000 or more employees to spend 8 percent of their payrolls on health benefits. A bill in Washington state would require companies of 5,000 or more to spend 9 percent of payroll on employee health care.
In each state proposal, affected companies that don’t meet the payment threshold would have to pay the difference into a state fund to assist the uninsured.
It’s worth pointing out compelling arguments raised by Ezra, among others, that this may not be the most effective/efficient method imaginable to boost coverage for a large segment of the population. But as Ezra added yesterday:
Should [Wal-Mart] be made to do better? Sure. But it’d be hard to justify laws targeting them and only them unless you’re looking at a longer game aimed at nationalized health care. Luckily, according to this quote from the AFL-CIO, that’s exactly what’s being attempted.
And as Jonathan Cohn added:
So maybe the Maryland law will do more good for low-wage employees (by shoring up their health insurance) than it will do bad for low-wage consumers (who will end up paying higher prices). Or maybe, as its critics say, it won’t. But if it convinces Wal-Mart to wash its hands of health care altogether and support a government-administered solution like every other industrialized country has, it will have been worth the effort.
Sounds right to me.