Many Workers of State’s Largest Firms
Getting $52 Million in Public Subsidies
By Edward Shanahan
A little-known aspect of the national health-care cost crisis is the extent to which state governments, including Massachusetts, are subsidizing employers whose workers, for various reasons, do not sign up for health insurance coverage through their companies.
In the case of Massachusetts, that subsidy has amounted to a total of $52 million worth of taxpayer-funded health care for employees and their dependents of some of the largest businesses in the Commonwealth, according to a recent state report.
For example, at the top of the list of companies with 50 employees or more who receive state health-care benefits are Dunkin’ Donuts, Stop & Shop and Wal-Mart, as well as Harvard University, CVS Pharmacy, the City of Boston, Cumberland Farms, many other enterprises, such as large hospitals, fast food chains and hotels, which employ many low-wage service workers. The study did not take into account employers with less than 50 workers.
In the case of Dunkin’ Donuts, during the period studied, the state subsidy to its workers amounted to $3,146.221; for Stop & Shop workers, $3.074,284; while Wal-Mart employees and dependents received $2,904,542 in public health assistance.
The report says that as a result of its analysis, “it is difficult to ascribe blame or to develop actionable steps” against employers.
Yet, a recent report in the New York Times about the struggle between states and businesses “over whose job it is to insure workers” said some states may be trying to “embarrass companies whose workers are on Medicaid or other forms of state assistance by publishing the employers’ names – as Massachusetts has already done …”
The study, egislatively mandated and conducted by the state Division of Health Care Finance and Policy, found that 98 percent of companies with 50 workers or more offer health insurance and that the average company contribute is 70 percent of the premiums.
Yet, among the reasons cited by the study for the large number of employed workers who get a public health subsidy is that they cannot afford to participate in employer-sponsored insurance programs. “Many employees report cost as the primary factor in declining offered coverage,” the study said. Family plan coverage is particularly expensive for low-income workers, averaging $245 a month in 2003. Added to the premium cost are deductibles and co-payments, which “may make the insurance offered through the employer unattractive,” the study finds.
Other reasons include workers being ineligible for coverage because of their part-time status, being new employees and not yet eligible, or health insurance offered by the employer was not regarded as a good value, and the availability of coverage through public safety-net care programs.
The study was based on information gathered during fiscal years 2003 and 2004. The study acknowledges that there are “problems” with the analysis, including missing data, inconsistent reporting by businesses, and the failure of some employees to identify their employer.
The study says “eligibility for employer-sponsored health insurance does not preclude eligibility for public programs.” Thus programs in Massachusetts that “provide a very important safety net for many low-income people” also “provide incentives, for both employers and employees, to shift health care costs to the public sector.”
To see a breakdown of the state report showing the number of employed workers who are receiving public health assistance, the names of the companies they work for, and the amount of public subsidy that is provided, download the state subsidy list.