Whole Foods’ crummy employee insurance: What John Mackey means by ‘choice’

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The whole boycott fracas over Whole Foods CEO John Mackey made me
curious: what is it about health reform that scares Mr. Mackey?
Mackey’s Aug. 11 Op-Ed in
the Wall Street Journal called for government to keep out of health
care–to let employers, charitable rich people and private insurance
companies take care of it and allow maximum choice. He especially
praises "high-deductible" health plans–which are the only form of
insurance that Whole Foods offers employees.

High-deductible plans for low-wage workers are the next best thing to
being uninsured: the upfront costs are so high that workers have to
weigh getting health care against paying the rent, to the detriment of
their health. Mackey, however, says in a laudatory John Stossel
interview about Whole Foods’ insurance that the high deductible means
employees "have to think twice about going to the emergency room for a
hangnail in the middle of the night."

And in the same video, another employee crows about saving up the
company health contribution so someday his family can "have a
baby,"which raises the question of whether childbirth is covered by the

In the middle of a long comment string at the Public Citizen blog,
a former Whole Foods executive who, since he’s left the company, has
nothing to lose, responded to a Whole Foods PR letter that is
apparently being sent to anyone complaining in writing about Mackey’s
Op-Ed. The PR letter is at the bottom, if you’re curious, along with
more critique of Mackey’s talking points. But first, the ex-employee’s
description of Whole Foods’ single and only employee health "choice."

For example, ALL Whole Foods Employees while receiving healthcare
coverage for free after 6 months of work (at full time status) still
have astronomical deductibles and co-pays.

1) General Medical Deductible for 2009 = $1,300.00! That means that
you, minimum wage earning worker, must pay $1,300 of your own money
before you get any coverage applied for medical services. After that
for in network visits, the coverage rate is 20/80, up to a maximum of
$4,600 out of pocket for the year. This means that if you get charged
$10,000 for a special hospital test (which has happened to me), you are
still liable for… $2,000!

Employees bear a terrible responsibility regarding cost of healthcare
even with WFM’s PPO plan.

2) Prescription Deductible for 2009 = $650! Again, you have to pay at
least $650 before you receive any prescription drug coverage. Beyond
that, you then have a calendar year maximum deductible of $1,300. So
after you’ve spent that first $650, even if you’re medications are now
at 20/80, you’ll still pay another $650 if you have prescriptions
costing in the thousands (and frankly, most of the new drug formularies
are incredibly expensive). FYI, the Prescription deductible/maximum out
of pocket is not included in the calculations for the general health

3) No mental health coverage. If you have anything (from ADD to
bi-polar to schizophrenia) – anything with a mental health coding
designation – you are immediately disqualified from coverage for that
diagnosis and the WFM PPO plan will not cover you for any treatments,
evaluations, tests, etc.

In my case this year alone (as I still have the WFM PPO plan through
COBRA as it is vitally necessary for my continued well-being – i.e. I
don’t have an option of not having health care), not only have I been
forced to pay medical premiums that amount to nearly 500-600 per month,
I’ve also shelled out about $6000 that i don’t really have and could
have used for other things.

And this is what we call a good system?

Please, it’s time for people to wake up, get the facts and realize
that there is way more going on here than "health insurance," there are
dozens and dozens of hidden systems of charges from high deductibles to
percentage co-pay systems (so rather than having say a $15 or $20
co-pay, you have a percent copay that can really kill you when you’re
facing bills in the tens of thousands of dollars). It’s a clever lie
that insurance companies and corporations present to the public, saying
– here’s this great system in which we cover 100% of our employees!

What they’re not saying is that system has massive hidden charges
that routinely threaten and undermine the financial stability and
ultimately well being of the employees.

The kind of low-benefit, high-cost insurance described above is
cheap for employers and allows Whole Foods to brag that it pays the
"full cost" of employee premiums, as it does in the letter below:

To our customers,

As you are aware, John Mackey wrote an Op/Ed piece that was
published in the Wall Street Journal earlier this week on health care
reform, one of the biggest and most emotional issues facing our
country. John’s intent was to express his personal opinions — not those
of Whole Food Market team members or our company as a whole. Still,
it’s very clear that John’s piece offended some of our customers, other
members of the communities we serve and some of our team members as

We offer you our sincere apology.

We’d like to clarify a few things that have been misinterpreted:

John’s Op/Ed piece was written in favor of health care reform.

In response to President Obama’s invitation to all Americans to put
forward constructive ideas for reforming our health care system, John
was asked to write an Op/Ed piece and he gave his personal opinion.
John titled the piece “Health Care Reform,” but an editor at the
Journal rewrote the headline to call it “Whole Foods Alternative to
Obamacare,” which led to antagonistic feelings by many. That was not
John’s intention – in fact, John does not mention the President at all
in his piece. John has posted the unedited piece to his blog where
people can read it as it was intended.

Whole Foods Market has no official position on the issue.

That said, we have attempted to be part of the solution in health care
reform for many years by providing innovative health care options to
our team members. We believe that our high deductible medical insurance
plan coupled with a company-funded HSA is an excellent way to empower
team members to make their own health care choices.

John wanted to share our experience with others through his Op/Ed piece.

He believes that the specific ideas he put forward would improve access
and cost of health care for more people. Because our plan has held down
overall costs (relative to other plans), Whole Foods Market has been
able to pay 100 percent of the premiums for our full-time team members
— about 89% of our workforce. (Part-timers are eligible for the
insurance plan too and pay the premium themselves.) Our team members
vote on our plan every three years to make sure they continue to have a
voice in our benefits.

Kind regards,

Customer Communications Team
Whole Foods Market World Headquarters
550 Bowie Street
Austin, Texas 78703

FYI the "HSA" (Health Savings Account) contribution by Whole Foods
is "up to" $1,800 a year per employee (I can’t find the average
payment), and certainly zero for part-timers. That isn’t enough to
cover the deductibles, much less the 20% copays. It would have to cover
whatever the insurance policy excludes: mental health care, and what

And here are two other things that Mackey called for, both of which
would allow employers to force workers into even more useless junk
insurance that excludes coverage for whatever the employer doesn’t want
to pay for, including for example cancer treatment. From Mackey’s

• Repeal all state laws which prevent insurance companies from
competing across state lines. We should all have the legal right to
purchase health insurance from any insurance company in any state and
we should be able use that insurance wherever we live. Health insurance
should be portable.

(This would automatically cancel state-level patient bills of rights
and other protections, and is a pet cause of GOP Sen. Mike Enzi of

• Repeal government mandates regarding what insurance companies must
cover. These mandates have increased the cost of health insurance by
billions of dollars. What is insured and what is not insured should be
determined by individual customer preferences and not through
special-interest lobbying.

(This would cancel even the basic federal protections for insurance
customers–allowing insurers to revive previous plans to force women to
have "drive-by" outpatient mastectomies, deny any hospital stay after
giving birth and exclude costly diseases from coverage.)

What Mr. Mackey means by "choice," then, is his choice to put more
money in his pocket and his employees’ choice to forcibly ration their
own health care.

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
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