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New Report Shows Taxpayers Will Foot Bill for Corporate Giants Dumping Workers On Medi-Cal

New Report Shows Taxpayers Will Foot Bill for Corporate Giants Dumping Workers On Medi-Cal

New Coalition Says Report Bolsters Case for AB 880 (Gomez)

SACRAMENTO, CA – As the Assembly Health Committee prepares today to consider legislation that would discourage the state’s most profitable corporations from dumping their health care costs onto taxpayers, a new report from UC Berkeley researchers says without AB 880, the number of workers dumped onto taxpayer funded Medi-Cal could reach 380,000 by 2019.

A new coalition that includes doctors, nurses, health care experts and working families pointed to the report as more evidence that California must take action to stop corporate giants like Walmart and Darden restaurants (parent company of Olive Garden, Red Lobster, and other chains) from circumventing their responsibilities under the Affordable Care Act (ACA).   

“Already more than a quarter million California workers in big corporations are paid so little they end up on taxpayer-funded Medi-Cal, and today’s new report shows taxpayers could be forced to pay the tab for hundreds of thousands more,” said Art Pulaski, Executive Secretary Treasurer of the California Labor Federation. “Profitable corporations that avoid their responsibilities to pay for health care must be held accountable. AB 880 ensures huge companies pay their fair share like the rest of us.”

The new UC Berkeley research unveiled this morning shows how corporate giants can avoid ACA penalties by cutting worker hours or wages so low, employees qualify for Medi-Cal, the state’s health care program for the poor, elderly or disabled.  Without AB 880, by 2019 as many as 380,000 low-wage workers, especially those in the retail and restaurant industries, could be dumped onto Medi-Cal, with California taxpayers picking up the tab.

“AB 880 improves access to quality health care by making sure giant corporations contribute their fair share of health care costs,” said Anthony Wright, Executive Director of Health Access California.  “AB 880 protects taxpayers, ensuring penalty dollars would go into a special fund that can only be used for Medi-Cal, increasing access to quality health care for millions of low-income Californians.”

Central to the Affordable Care Act is the idea of shared responsibility — that employees, employers, and government all contribute to stable, affordable health care system for all.   Individual and employer penalties encourage every sector to do their part. But Walmart and other low-wage employers plan to flout the law — driving wages and hours so low workers qualify for Medi-Cal, they can avoid penalties they'd pay if the workers earned enough to seek health care through the state healthcare exchange, Covered California.

AB 880 (Gomez) would protect California taxpayers by requiring large employers to pay their fair share of the costs of healthcare when they dump workers onto Medi-Cal by cutting hours or wages.  Small and mid-size businesses would be exempt.

“Walmart pays its executives millions each year, and there is no reason it should get away with shifting its costs onto taxpayers,” said Jim Araby, Executive Director of the United Food and Commercial Workers. “AB 880 protects taxpayers and small businesses by making sure corporate giants do their part so everyone can access health care.”

Access the UC Berkeley report here: http://laborcenter.berkeley.edu/healthcare/ab880_factsheet13.pdf.



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