Walmart Explores Offering Private Health Insurance for Small Businesses; In Praise of Walmart

Once again I am here to sing the praises of Walmart. Over the years I have done so on many occasions.

Many misguided souls take the other side. They blame Walmart for ruining mom and pop grocery stores, mom and pop hardware stores, etc.

Not me, I praise cheaper prices. Moreover, it's what consumers voted for with their hard-earned dollars.

If anyone wants to pay more for stuff, all they have to do is shop at a mom and pop hardware store, grocery store, or pharmacy. Most don't because they want a bargain.

Today, I have good news. Walmart-style competition may be on the way in the healthcare business.

The Orlando Business Journal writes Wal-Mart exploring private health insurance exchange for small biz.

Wal-Mart is exploring the idea of building a private health insurance exchange tailored to offer cheaper health insurance to small businesses, a vice president told Orlando Business Journal Jan. 11.

Marcus Osborne, vice president of health and wellness payer relations for Wal-Mart Stores Inc. (WMT), spoke to OBJ after his keynote speech at the Foundation of Associated Industries of Florida’s 2013 Health Care Affordability Summit. Osborne said Wal-Mart wants to work with insurers and managed care companies to find new, low-cost health insurance options tailored for small companies, which historically have limited options.

The idea is to offer those products through a health insurance exchange — or as Osborne said, simply a marketplace — that would leverage Wal-Mart’s buying and marketing power to make the exchanges widely available and used. “It would allow small employers to piggyback Wal-Mart,” Osborne said. “We haven’t got it all figured out, but it’s one of the things we’re looking at.”

“The biggest problem today small employers face from a health insurance perspective is they have no alternatives,” Osborne said. “If they find anything, they’ve got to take it. There’s something wrong with that.”

In Praise of Walmart

Obamacare is going to raise the cost of healthcare. Walmart will lower costs. I have been waiting for this since Summer of 2008.

Flashback June 22, 2008: Trade Wars, Health Care, and Wal-Mart

This post is about trade wars, tariffs, health care, and Wal-Mart. I will tie these themes together starting with a look at Wal-Mart and health care.

I have many disagreements with Jim Jubak, but he hits the nail on the head with Let Wal-Mart fix US health care.

I know who can fix our broken health care system -- and who can't:

• Not presumptive Republican nominee John McCain. He proposes a tax credit of $5,000 per family to encourage us to buy private health insurance.
• Not Democratic presidential candidate Hillary Clinton. She proposes universal health insurance supported by tax credits.
• Not Democratic presidential candidate Barack Obama. He proposes a mix of public and private health insurance with government subsidies to those who don't qualify for government insurance plans such as Medicaid.

I say, let Wal-Mart Stores (WMT) do it. Hold your guffaws. Stifle your impulse to scoff. Control those sputters of rage.

Wal-Mart has done more to expand coverage and lower costs in the past year than any government program to come out of Washington in the past 10 years. And I'd bet the new programs that this company -- known for stiffing its own part-time workers on health care benefits -- has announced in the past year will do more to expand coverage and cut costs than anything likely to come out of a McCain, Clinton or Obama first term.

Letting Wal-Mart run the health care system would fix many of those problems. It's a company that understands how low prices can build market share and thus increase profits. Furthermore, it's a company with a culture of cutting costs that has shown no compunction in pushing suppliers to the wall over price. The Wal-Mart motto ought to be, "Make it cheaper, or we'll find someone who can." I'd love to see that attitude brought to bear in health care.

Inquiring minds will want to read the rest of the article. It's surprisingly good.

Jubak makes a compelling case. He never said this explicitly but I will. "We do not need higher wages or higher prices. We need lower prices and a dollar that buys more".

Hopefully a good idea, long overdue, is about to happen. I repeat what I said in 2008: "We do not need higher wages or higher prices. We need lower prices and a dollar that buys more".

Walmart-style competition would do just that.

My primary fear is regulators will kill the idea based on trumped up charges of some sort (or bribes from healthcare providers who fear competition) before the idea takes hold.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com