October 1, 2005
Omaha World-Herald
Paul Hammel

LINCOLN -- Nebraska taxpayers paid health care costs last year for nearly 10,000 workers employed by some of the state's biggest businesses.

At least 9,369 workers and an unknown number of their dependents received benefits through Medicaid, the taxpayer-financed health care system for the poor.

Wal-Mart topped the list, with 654 workers receiving Medicaid, according to the report by the Nebraska Health and Human Services System.

The workers are only a fraction of the 256,000 Nebraskans receiving Medicaid benefits, most of whom are children. The biggest Medicaid expenditures go to the elderly and disabled.

Nevertheless, a state senator said the report on employers raised questions about whether large corporations, such as Wal-Mart and Tyson Fresh Meats, which ranked second, pay their fair share of health care costs or shift them to taxpayers.

Dan Fogleman, a Wal-Mart spokesman on benefits issues, said Wal-Mart has surveyed its employees nationally and found that three months before they join the company, 7 percent were on Medicaid.

That figure drops to 5 percent after they are hired and to 3 percent after two years, he said.

"We can actually demonstrate that we take people off Medicaid," Fogleman said. He also questioned whether the state figures included seasonal employees.

A similar report issued in Iowa in May found that Wal-Mart had the highest number of employees receiving Medicaid benefits in that state, with 845, followed by Tyson at 388 and Hy-Vee Inc. with 361.

Individuals making up to $ 17,712 a year can be eligible for Medicaid in Nebraska. A worker with two dependents can make up to $ 29,772 and remain eligible.

The federal government pays about 60 percent of the cost of Medicaid, the state about 40 percent.

Health and Human Services prepared its report at the request of State Sen. John Synowiecki of Omaha.

Synowiecki said it's important for the state to consider how much employers are adding to the burgeoning cost of Medicaid and whether they are paying their fair share.

Nebraska, he said, lags other states in offering health-care benefits.

About 44 percent of private companies in Nebraska offer such benefits, according to the Kaiser Family Foundation, ranking the state 49th in the country. That foundation estimated there were 184,310 uninsured people in the state.

"I don't know if we can single out Wal-Mart, but the largerbased employers in the state need to realize that a facet of being a good employer is offering their families affordable health insurance," Synowiecki said.

The report was issued as a state task force studies how to rein in the cost of Medicaid, a $ 1.4 billion program that is the fastest-growing segment of state government. Medicaid consumes about $ 1 of every $ 7 in state money that is spent.

City councils in Lincoln, Plattsmouth and Fairbury also are debating whether to approve new Wal-Mart supercenters there. The social costs of big retailers like Wal-Mart have been a growing issue here and across the nation.

Among the concerns are taxpayers subsidizing profitable companies that don't offer health care benefits or that offer insurance that is too expensive for their workers.

Jane Raybouldof B&R Stores, the largest grocer in Lincoln, said city leaders should consider whether Wal-Mart is a drain on taxpayers before allowing a third supercenter in town.

Wal-Mart said that it helps people get off assistance and that because it is the largest employer in the nation, it naturally heads such lists.

Fogleman, the Wal-Mart spokesman, said the number of uninsured is an industrywide problem that speaks to the larger issue of exploding health care costs.

The company's Web site says nearly half of its 1.2 million workers in the United States purchase health insurance coverage through the company, which pays about two-thirds of the cost of the plan.

The Nebraska report on Medicaid looked at employers that had 25 or more Medicaid recipients.

The report showed that 130 employers had 9,369 "family units" that had at least one member receiving Medicaid benefits.

Assuming that those families had only one person receiving Medicaid, the number represents about 4.7 percent of all Medicaid recipients in the state.

Wal-Mart ranked highest, with 654 family units on Medicaid, followed by Tyson at 548 and Mosaic, a provider of services for the developmentally disabled, with 306.

The Nebraska Appleseed Center for Law in the Public Interest, an advocacy group for the poor, also ranked companies with the highest percentage of employees on Medicaid but looked only at the top 105 employers in the state.

Sitel Corp. had 8.1 percent of its workers on Medicaid, followed by Swift at 7.7 percent and Greater Omaha Packing Co. at 6.8 percent. Wal-Mart ranked fourth in this measurement with 6.4 percent of its workers on Medicaid.

The Appleseed Center estimated that Medicaid benefits to those workers amounted to $ 110 million a year, which would be nearly $ 1 of every $ 10 spent in the program.

However, the director of the state Medicaid program questioned the assumption behind that estimate.

Mary Steiner said such an estimate should not include, as the Appleseed Center figure did, disabled or elderly persons who probably aren't working.

Discounting those groups, Steiner said, an annual impact of about $ 28.7 million was more reasonable.

She also said there could be some duplication in the "family units" receiving Medicaid due to workers having two jobs, or spouses working for different employers.

Both Steiner and Danielle Nantkes, staff attorney for the Appleseed Center, agreed that the "family unit" number probably was conservative because it didn't account for the number of members within families receiving Medicaid. In Nebraska, the average family size is four.