Senate President Beth Edmonds is co-sponsoring a bill in 2006 that will look at what the state can do with large employers like Wal-Mart that don’t provide adequate health insurance, forcing their employees to turn to the government for assistance.
Edmonds said her bill would first call for a study of the problem and then look at options for recouping the money or working with large employers to provide adequate coverage. She said one possibility would be to make better use of the state’s subsidized insurance program, DirigoChoice, which currently is limited to small businesses and individuals.
“This bill is one I’ve been thinking about for a while,” said Edmonds. She has been looking at proposals around the country where states are considering charging large employers a fee or a tax “if they don’t make a specific effort to provide healthcare for their employees.”
“The state and other policy holders end up paying,” she said, for those who don’t have adequate health coverage, either through programs like Medicaid or in the form of higher premiums to cover bad debt and charity care.
The bill is being co-sponsored by Rep. Marilyn Canavan, D-Waterville, who said her original idea was to look at Maryland’s “fair share” effort to see if it was applicable to Maine.
The bill, which was vetoed by Maryland’s Republican governor earlier this year, would have required companies with more than 10,000 employees to spend 8 percent of their payroll on healthcare benefits or pay into the state’s health program for the poor. As written, only Wal-Mart would have been affected by the legislation.
Canavan said her intent now was to look at the extent of the problem in Maine and find a way to recoup the money government spends on healthcare for employees of large companies.
“I don’t consider it a tax,” Canavan said. “Some of these larger companies are well-served by some of the benefits provided by the state,” including tax increment financing (TIF) and the business equipment tax reimbursement (BETR). “They in turn should do their share by providing health care benefits for their employees.”
Edmonds of Freeport said she makes a distinction between those companies that offer plans that look good on the surface but in fact are so expensive as to be unaffordable to their employees. She also is critical of plans with deductibles so high they only are useful when a catastrophe hits, not for regular medical care.
“There’s no easy solution to this, but I think people pick on Wal-Mart because they make this great claim they have all these benefits, but I’m not sure their employees can afford all these benefits. They’re not paying their people very much, and with the benefit that’s being provided, they still end up in the emergency room…or bankrupting themselves,” to pay their health bills, Edmonds said.
Rep. Arthur Lerman, D-Augusta, proposed a bill last session that would have charged big-box stores a 3 percent tax on gross sales to recoup state Medicaid money and other general assistance paid to big-box employees.
The tax would have raised between $60 and $90 million a year, according to Lerman, and two-thirds of it would have gone to the Dirigo Health fund to provide insurance to individuals and their families who work at big-box stores. The rest would have been used to support small business development.
That bill was killed in committee under pressure from the business lobby based on the grounds it was unconstitutional. Representatives from the Maine State Chamber of Commerce and the Maine Merchants Association testified against it.
Edmonds said she knows her bill will be opposed by business, but she wants to get the study of the problem underway. She referred to a story in last week’s Sun Journal of Lewiston where the paper obtained information on the top 50 employers in the state. It showed 4,400 full- and part-time employees got some sort of state assistance in October.
In terms of overall numbers, Wal-Mart had the most at 1,001 or 15.4 percent of its workforce. Also on the list were the state’s major supermarket chains, Sears, the state’s major oil companies, which operate gas station convenient stores, and homegrown retailers.
“That’s the kind of analysis I think we need to start having,” Edmonds said.
Edmonds said she knows some people don’t want to deal with the problem.
“You are dealing with it whether you want to or not,” she said, in terms of higher premiums for the insured or higher taxes to pay for government assistance. “You can deal with it indirectly, or you can deal with it directly and more efficiently.”
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