Many Wal-Mart workers use Medicaid One in six of its employees require the assistance program.

Posted: March 02, 2006

HARRISBURG — Of Pennsylvania's 10 largest employers, Wal-Mart has the highest percentage of employees enrolled in the state medical assistance program for the poor and disabled.

About one in six of Wal-Mart's 48,000 employees are enrolled in the Medicaid insurance program, at a total cost to the state of more than $15 million a year, according to state data.

The retailers with the second- and third-largest numbers of employees in the state, Giant Food Stores L.L.C. and Weis Markets Inc., have a roughly similar ratio of workers on Medicaid. By contrast, UPS, the state's fourth-largest private employer, has one in 17.5 workers on Medicaid.

These figures, provided to The Inquirer by the Department of Public Welfare at the newspaper's request, reflect full- and part-time workers. The agency did not issue figures for employees' dependents on Medicaid, which would likely significantly increase the number of the program's recipients and its costs.

The data will add fuel to the debate, which may be part of today's budget hearing in Harrisburg, over whether too many employees at the nation's largest retailer are relying on public assistance.

State Rep. Jake Wheatley (D., Allegheny) said yesterday he would ask the state Department of Public Welfare today to investigate whether corporations are abusing the tax-funded Medicaid program.

"We need to protect taxpayers from subsidizing large corporations that can afford to provide health care to their employees," Wheatley said in a statement.

A spokeswoman for Wal-Mart Stores Inc. yesterday defended the company's benefits plan as one that has "helped thousands of Americans on public assistance gain access to private health care."

Kelly Hobbs said the company had recently announced a health-care program that is more affordable and reduces the wait for eligibility.

Hobbs also questioned the department's release to The Inquirer of what she termed partial data, saying any state report on Medicaid recipients should include all employers, both governmental and private.

Wal-Mart, with 1.3 million employees in the United States, reported revenue of $316 billion and profit of $11.2 billion in its latest fiscal year.

Public-assistance rolls

Advocates for low-wage workers say the Pennsylvania figures reflect a national trend in "corporate welfare," as more private companies - many of them nonunion - reduce benefits to reduce costs, forcing workers onto public-assistance rolls.

"Wal-Mart is making billions in profits, while pushing people onto medical assistance at a time when 100,000 people in Pennsylvania were in jeopardy of losing benefits," said Jonathan Stein, general counsel at Community Legal Services in Philadelphia. "The situation only makes life difficult for other poor people who could only look to Medicaid."

Swelling state medical assistance rolls and higher health-care costs compelled Gov. Rendell last year to limit some services and increase some fees for many of the 1.8 million Pennsylvanians on medical assistance.

Wal-Mart, the largest employer in the state, has a total of 7,577 of its employees, or 15.8 percent, on medical assistance in Pennsylvania. The company's workforce is more than double the number of workers at the next-largest retailer, Giant Food.

Of Giant's 19,000-member workforce, 2,244 employees, or 11.8 percent, are on public assistance, according to the welfare department.

Competitive benefits

A Giant spokeswoman said yesterday she had no way of verifying the information provided by the state but said that the company offered "competitive" wages and benefits.

"We feel good that we make health-care coverage available to our associates, full and part-time," spokeswoman Tracy Pawelski said.

Of the 14,000 employees at Weis, 13.4 percent receive public medical assistance.

The data reflect the number of workers who were enrolled in the state medical assistance program between July and September 2005.

Agency researchers matched a file of wage information from the Department of Labor and Industry with active Medicaid recipients for that same time period. The agency said the workers were both full-time or part-time, an official said.

The data do not include the number of dependents enrolled in the state's children's health-insurance program and do not include other benefits, such as food stamps, which have increased the numbers and overall costs in other states.

Rep. Wheatley is the lead sponsor of a bill that would require the welfare department to report annually on the number of people on Medicaid who are employees of businesses with 20 or more workers. But the bill, introduced last year, has stalled in committee.

In New Jersey, a similar bill, which would track the employers of residents receiving state FamilyCare health-insurance benefits, recently passed the Senate. An unofficial study of FamilyCare recipients found that Wal-Mart led all other New Jersey employers, with 589 employees and their children on the rolls.

Fewer than 60 percent of large employers now provide health-care coverage for their workers, according to a recent Kaiser Family Foundation survey. In the decades after World War II, Pennsylvania's largest employers, U.S. Steel and Bethlehem Steel, provided full benefits and pensions to their unionized employees.

In Maryland, a new law, aimed at Wal-Mart, requires that employers with more than 10,000 workers spend 8 percent of their labor costs on employee health benefits. The legislation was highly controversial and survived a gubernatorial veto to become law.

Proponents are pushing similar "fair-share" legislation in at least 30 other states, including Pennsylvania, where House Minority Whip Mike Veon (D., Beaver) said he intended to introduce a Maryland-style bill soon.

Earlier this week, Wal-Mart chief executive officer Lee Scott appealed to the nation's governors not to sign legislation like the Maryland bill, saying that forcing companies to spend an arbitrary percentage on health care discourages low-cost, quality health care.

While Rendell has said he does not support such a bill, his top policy adviser said the administration is exploring other options, among them requiring large employers who cannot cover the health-care costs for all their employees to pay an assessment to the state.

"These programs were never intended to cover people who are gainfully employed," said Donna Cooper, secretary of policy of planning. "But this is a national problem, and part of the national solution has to be keeping these employers at the table paying for health care."

Contact staff writer Amy Worden at 717-783-2584 or

Inquirer staff writer Bob Fernandez contributed to this article.


For Medicaid eligibility requirements, visit the Pa. Department of Public Welfare's Web site via

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