Robert Frank reviews Steven Greenhouse’s new book “The Big Squeeze”

Posted by Kendall Harmon

Eight years ago, Deborah Shank was seriously injured when a semitrailer rig struck the driver’s side of her minivan. Because Shank, then a shelf stocker at a Wal-Mart store in Cape Girardeau, Mo., had recently qualified for the company’s health plan, most of her immediate hospital expenses were covered. But because the accident left her in a wheelchair, with permanent brain damage, she continues to require full-time nursing care. To help pay for it, a court set up a $417,000 trust, using the proceeds of a lawsuit against the company whose driver caused the accident.

As The Wall Street Journal reported last year, however, a court ordered the family to reimburse Wal-Mart for the $470,000 it had spent for Shank’s medical care. The court’s ruling cited a clause in the company’s health plan that gave it the right to recoup medical expenses if an injured employee collected damage payments in a lawsuit.

This practice of expense recovery, known as subrogation, has been defended on the grounds that it is unfair for someone to be reimbursed twice for the same medical expenses. The proceeds of Shank’s lawsuit, however, were insufficient to cover even her nursing care, much less her original hospital expenses. Until recently, companies rarely filed subrogation suits in such cases. These suits are now widespread.

In this and a host of other ways, the environment confronting American workers has grown nastier in the last three decades. Millions of workers have seen their employers abandon longstanding company pension plans, and even larger numbers have lost their health insurance. Violations of safety regulations and other work rules are increasingly common. The median hourly wage, adjusted for inflation, has scarcely increased at all, even as the risk of being laid off has risen sharply.

Read it all.

Filed under: * Economics, PoliticsEconomy

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Posted May 28, 2008 at 5:03 am [Printer Friendly] [Print w/ comments]
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