Home > Uncategorized > Rising costs prompt Wal-Mart to scale back health coverage

Rising costs prompt Wal-Mart to scale back health coverage

Cost pressures in group health coverage segment have prompted the nation’s largest employer to scale back coverage for its work force and increase employee cost sharing.

Greg Rossiter, a Wal-Mart spokesman, said the decision to deny coverage to new part-time employees resulted from the company’s revamping of its health care offerings in light of rising costs.

“Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different,” Mr. Rossiter said. “We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

The full New York Times story is here.

Wal-Mart isn’t representative of the large group market given its large number of part time and low wage workers.  However this development shows that rising medical costs are rapidly chipping away at the availability of employer-based coverage in the large group market just as has occurred in the small group market.

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