Walgreen to send employees to a health exchange

It says the 'marketplace solution' will give its 160,000 eligible workers more choices at lower costs.

By Jonathan Berr Sep 18, 2013 12:11PM
People walk by a Walgreens in Boston, Mass., on April 30, 2013 (Photo by Wendy Maeda/The Boston Globe via Getty Images)
Updated 8:30 a.m. ET, Sept. 19

Faced with rising health care costs, Walgreen (WAG) has become the latest big employer to send its workers to a private health care exchange, similar to those created by the Affordable Care Act. These shifts away from traditional employer-provided health care plans underscore the sea change President Barack Obama's signature legislative achievement is generating.

According to The Wall Street Journal, starting next year the country's top drugstore operator will pay a fixed amount for employees to purchase coverage from a suite of as many as 25 plans offered through a private insurance exchange run by Aon Hewitt.

The Deerfield, Ill., company, which will continue to offer prescription benefits for employees, says the move will provide its 160,000 eligible workers more choices at lower costs. Its contribution for health care benefits next year is expected to be at the same level as this year.

"We will continue to invest in the health of our employees and their dependents while using a marketplace solution that offers a wide variety of plan options that meet the affordability standard of the Patient Protection and Affordable Care Act," said Kathleen Wilson-Thompson, Walgreen's senior vice president and chief human resources officer, in a press release.

IBM (IBM) and Time Warner (TWX) both recently announced plans to move their retirees to
exchanges. More such moves are likely to come. Survey data from Towers Watson and the National Business Group on Health cited by The Journal found that 24% of employers said they were "likely" to provide access to health care exchanges over the next five years. 

The announcement from Walgreen, which operates 8,117 drugstores in 50 states, comes as Congress debates -- yet again -- whether to defund Obamacare. House Republicans on Wednesday decided to allow Tea Party backers to have a vote on the issue this week even though Democrats have warned that it could lead to a government shutdown. Sign-ups for the exchanges are due to begin Oct. 1.

Even fans of the president such as the AFL-CIO have issues with Obamacare, which the labor organization recently called "highly disruptive" to union health care plans. Critics of the overhaul like the conservative Heritage Foundation seem to think a repeal victory is within their grasp. The think tank's Ron Bluey noted in a blog post on Wednesday that the movement to stop the controversial law had reached a "critical moment." 

"We may not all agree on the solution for America's health care system, but an increasing number of Americans agree that Obamacare is the wrong prescription," he writes.


Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr and at jonathanberr.com.

Note: This story was updated to correct an earlier characterization of the Aon Hewitt health exchange as one created by the Affordable Care Act.

185Comments
Sep 18, 2013 12:31PM
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The only reason the health exchanges are cheaper is because they are subsidized by the taxpayers.  Now, instead of Walgreens and the employees footing the bill for the insurance premiums, taxpayers will have to pick up some of the tab.

We've doubled the amount of people dependent on the gov for food stamps.  We've doubled the amount of people dependent on the gov for disability payments.  And now we're going to double the number of people dependent on the gov for health insurance.  And all of this has happened in the last 5 years.

Sep 18, 2013 12:53PM
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There is nothing affordable or caring in this act.  It is just a governmental power grab.
Sep 18, 2013 12:36PM
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Only the dumbazz liberals are surprised by this.
Sep 18, 2013 1:51PM
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Another failure for the un-Affordable Care Act.  A great healthcare plan is trashed and the employees get money to buy it on their own.  Only the sick ones will do so and the healthy ones will pocket the cash.

 

This will further kill the plan as none of the young--non users- will enroll. 

 

This is the worst bill ever by the worst president ever.

Sep 18, 2013 12:59PM
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I don't like Obamacare but the 1st paragraph of the story is incorrect: Walgreens is using a PRIVATE EXCHANGE not the public exchange.  The reporter needs to get the facts right.  This is a Defined Contribution health plan.  Employees get to decide which health plan option is best suited for their family.  The private exchange is not linked to Obamacare. 
Sep 18, 2013 12:37PM
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Now if Congress will only defund the Affordable Care Act maybe we can get rid of this expansion of government into socialism.  If more companies follow suit maybe buying of health insurance will return to a personal responsibility.  It is just insurance, no different than automobile insurance or home insurance.  If we would eliminate the provisions of Emergency Medical Treatment and Active Labor Act and it's cost shifting effects the costs to people who actually pay for their medical care would decrease.

 

Health insurance is a personal responsibility which currently being used as another mechanism for the redistribution of wealth by a socialistic leaning centralized federal government.

Sep 18, 2013 3:03PM
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ObamaCare will end up bankrupting America, but it will get democrats more votes from the gimme gimme government tit suckers.
Sep 18, 2013 3:38PM
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I run a small company in Georgia (14 employees) with revenues over $10 million and last month I told everyone that I was not going to renew our Blue Cross/Blue Shield plan for 2014.  Even with their contribution the costs have just gotten way to high.

I wil continue to give them the company contribution and they can spend it anyway they like.  Obamacare will essentially take healthcare out of the hands of business.  

The goal of the Dumbocrats is to force everyone into a single payer plan that is run by the government.  If Obamacare is so good why did Congress exempt themselves?  And why has Obozzo given so many waivers to his political allies?

Funny thing though, the unions are not very happy with the plan either since it is less than than contracts call for.

Unattended consequences!!  Remember Harry and Nancy: "We have to pass it before we read it!" and Obozzo: "If you like your doctor you can keep him".  Well the problem with that statement is How many doctors will see you  as a patient if you have this crap?  It's hard enough now to find a doctor that will see you if you are on medicare.  And now that we have read it "WE DON'T LIKE IT".

Just saying....
Sep 18, 2013 1:56PM
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The ruling class "" DEMOCRATS'''''  were under the impression that everyone would just hold still  and take it.
 The problem is not very many Democrats  are business people.

 UNINTENDED CONSEQUENCES.

 The more complex the machinery, the easier to gum up the works !!!!!!!!!
Sep 18, 2013 12:34PM
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Must have a deal with Aon.  As I'm sure many Walgreen's employees make under 400% of the poverty level making them eligible for the subsidy/tax credit, the only way they can qualify for it is by going through the public exchange, not a privately run exchange.
Sep 18, 2013 4:58PM
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Are all liberals and democrats STUPID enough to believe that a state run Monopoly will lower healthcare costs, and provide a good (value) product?   Monopolies are always bad for the consumer, and state run ones are the worst.

Look at the 'public option' in education is there is any doubt.   It costs three times what private education costs, and provides an incredibly bad product.   If there is any doubt, study Chicago's Public school system.  59% graduation rate, 9th grade reading skills, and Jethro Bodine level math skills, all for 13,800 a year per student...

Want to look at other areas of state monopolies?  Thought not...

MONOPOLIES are always bad, and state run ones are the worst...  
Sep 18, 2013 5:44PM
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"Its contribution for health care benefits next year is expected to be at the same level as this year." - In other words, Walgreens has decided to keep its expenditures levels, even thought healthcare premiums are obviously going up!  I can guarantee you the employees are going to get screwed in the long run.  Why is it so hard for people to figure out (over and over and over again) that there is no such thing as a free lunch?
Sep 18, 2013 7:31PM
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If you want to keep your plan, You can!.... OOPS Nevermind
Sep 18, 2013 3:55PM
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It would have been so much easier if the federal government would have worked with the states to remove limits for competition for health insurance.  Instead of that they actually raised the cost per individual to include a multiplier per person per family.  For years the health care cost of covering the family was not 6k per person, it was 1-2k per person.  How can a family of 4 pay 24k in health care coverage with a house hold income of 50-60k?  The only thing that is good is coverage for children up to 25 years of age.  Even that has had an affect on what colleges can offer.  They used to be able to have a limited health care plan that they could charge $30.00 per month for.  Now that it is $150.00 or more if they even offer it any longer.

Also instead of putting limits on things that have caused price increases, they have put taxes on those suppliers to increase those costs even more.  They have also given medical companies reasons to farm research and medical equipment manufacturing overseas.

So another loss for the American worker.

Giving more tax credits is once again going to cause the tax rate to go up.

another loss for us the tax payers..

 

Sep 18, 2013 7:12PM
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WHEN THE DEMOCRAPS FIGHT FOR SOMETHING THE LIBERAL MEDIA CALLS IT PRINCIPAL, AND WHEN THE REPUBLICANS FIGHT FOR SOMETHING THE LIBERAL MEDIA CALLS IT POLITICS.     FUNNY
Sep 18, 2013 6:54PM
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ALVINO IF YOU HAD YOUR EARS OPEN YOU WOULD HAVE HEARD THE SOLUTION FROM THE REPUBLICANS, ONE OVER STATE BORDERS TO PICK INSURANCE, TWO, TORT REFORM, THREE TIGHTER HOSPITAL COST CONTROL AND FOUR DUE TO TORT REFORM, LOWER MALPRACTICE INSURANCE THEREFORE LOWER DOCTOR COST
Sep 18, 2013 5:31PM
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OBAMANUT CARE IS STARTING IN ALREADY. WALGREENS IS GIVING ALL THEIR EMPLOYEES ONE SET AMOUNT OF MONEY TO BUY THEIR OWN HEALTH CARE REMOVING THEM FROM ANY INCREASE IN HEALTH CARE COST AND LEAVING EMPLOYEES TO PAY FOR ANY INCREASE. INCREASES WILL HAPPEN BECAUSE INSURANCE COMPANIES HAVE TO TAKE PEOPLE WITH PRE-EXISTING CONDITIONS WHICH WILL COST MORE. ALSO IT TAKES YOUNG PEOPLE TO FUND OBAMACARE AND MEDICARE BUT THEY ARE NOT FINDING JOBS AND ARE OWING STUDENT LOANS
Sep 18, 2013 4:51PM
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Stop paying for the LEECHES.  Their health issues are no reason to ROB the rest of us!

They should receive no taxpayer benefits while they have a single dime of wealth.  We grow tired of the LEECH class ROBBING the rest of us.   Better to shoot the thieves...  It is amazing that democrats condone theft from one group in return for votes,  to support these LEECHES.

Sep 18, 2013 1:23PM
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Can someone explain to me,about the cadillac health insurance policies being taxed in 2018.Does that mean individuals, the company, or both.

Sep 18, 2013 12:26PM
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Instead of having the burden of having to offer and run a health plan for their employees they can give them a flat amount to use to buy insurance from the state exchanges. Sounds good for the employer and the employees.
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