Wal-Mart Folds Under Pressure

Last week, I posted about the Shank family. You can read the entire post here which also has a link to the original CNN story. Basically though it concerns a worker at Wal-Mart, Deborah Shank (pictured with her husband, Jim) who collected, after legal fees and other expenses, $417,000 in a settlement with a trucking company after an accident left her permanently brain damaged and in a wheelchair. Then Wal-Mart sued for the $470,000 it had spent on her medical care. Oh, and by the way, her son was killed in Iraq. Way to piss off both sides of the aisle Wal-Mart.

Ms. Shank currently has about $270,000 to get her through the rest of her life. After the $270,000 runs out, then you and me and everyone else in the US will be paying for her care. See, that is the crazy thing here. A company like Wal-Mart will say that by not collecting the money it paid out, then insurance premiums will rise and that everyone will pay more. The way I look at it, Wal-Mart has already been paid by the premiums from their workers for the money they paid out. They then get a windfall from the work of the attorneys for the injured. Then, there is still nothing stopping them from raising premiums. Meanwhile, the workers at Wal-Mart don't share in the windfall, have their premiums raised because Wal-Mart can point to all this unnecessary litigation, and then to really kick you in the ass, your taxes go up because you have to help pay for the injured person.

Subrogation was never really a big deal until about 2006 when the Supreme Court made it much easier for health plans to go after the money. Most health plans with a conscience don't do it. Obviously Wal-Mart doesn't. The only reason they caved is because of the bad publicity and because members of Congress have now threatened legislation which would put a halt to the practice entirely.

In caving to pressure, Wal-Mart had this to say, "Ms. Shank's extraordinary situation had made the company re-examine its stance. Occasionally others help us step back and look at a situation in a different way. This is one of those times."

Wal-Mart then went out and sued some more people for the exact same thing. Oh, but they lowered prices in the stores, ensuring that Chinese children will be working late tonight.

Thanks to everyone who sent me articles on the decision of Wal-Mart. I really appreciate it.