Redefining Corporate Welfare

Ian Donnis points to a "strong post" (alluded to earlier) which illustrates how approximately $11.2 million of taxpayer dollars are going to government supplied health care for workers who don't get health care through their jobs.

Where is that money going, you might ask….

It is going to Bank of America, and their 382 employees on RIte Care / Rite Share/ or Medicaid. It is going to the 610 employees of Citizens Bank that are getting our taxes. It is only 310 folks at CVS (plastic bag, anyone) but 500 Wal Mart employees are paid for by the State. In total more than 4,000 workers for these corporations get us to pay for the health insurance. That, my dear reader, is corporate welfare.

First, a correction. The numbers above are taken from the Public Health Access Beneficiary Report and are equal to the combined total of employees + dependents covered by RIte Care / Rite Share / Medicaid, not just the employees as was claimed. In reality, the numbers of employees of Bank of America, Citizens Bank, CVS and Wal Mart that qualify for the aforementioned programs are, respectively, 112, 179, 86 and 140 (not 382, 610, 310 and 500).

Regardless of all that, underlying the charge is the false premise that companies should be obligated to provide all employees (including part time and temporary workers) health care. Last time I checked, there is no such law or rule. So companies aren't shirking their responsibilities--and taking "corporate welfare" from the government--if they never made the promise in the first place.

Additionally, as the Health Insurance Commissioner Christopher F. Koller explained in his overview of the 2005 Rhode Island Employer Survey Report (both referenced in the Public Health Access Beneficiary Report):

Faced with annual double digit premium increases, small employers are being forced to decide between increasing cost sharing with employees, dropping health benefits altogether, or taking a hit to core business performance. Employees are forced to decide between the risks of going uninsured or sharing in the rising costs.

Thus, even if employers had offered generous health care benefits in the past, the economics have changed and adjustments had to be made so that companies could remain competitive. (Something the public sector seems to have a hard time grasping, incidentally). This includes reducing their ability to subsidize employee health care plans (or offer defined benefit pension plans for that matter). So long as we continue to rely on an employer-centered health care system, that is the way it will continue to be. Such reductions don't mean employers are shirking their responsibilities. Often times it's just the opposite: they're trying to remain competitive and continue to employ people.