Wal-Mart, the nation’s largest private employer, is cutting back its health benefits to workers, in a reminder that the nation’s health care system remains broken 18 months after the passage of the Affordable Care Act.

Citing rising costs, Wal-Mart, the nation’s largest private employer, told its employees this week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company’s health insurance plans.

In addition, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered.

This is a big shift from just a few years ago when Wal-Mart expanded coverage for employees and their families after facing criticism because so many of its 1.4 million workers could not afford or did not qualify for coverage — rendering many of them eligible for Medicaid.

Under pressure from states saddled with rising Medicaid costs and from labor unions and community groups, Wal-Mart had agreed to offer part-time employees, even those averaging less than 24 hours a week, health care insurance after a year on the job, shaving a year off the eligibility requirement. Wal-Mart also said that it was offering health plans that cost its employees about $250 a year for family coverage.

About 58% of all large companies don’t offer health coverage to part-time workers. But the difference here is that Wal-Mart is a large retail outlet with millions of associates. They can set their schedules so practically nobody can get full-time work even if they want it. This probably means that hundreds of thousands of employees will lose their coverage.

By 2014, they may qualify for expanded Medicaid, or could purchase subsidized coverage on the insurance exchanges. But until then, they will probably just go without insurance, adding to the swelling ranks of the uninsured.

And a word on the “rising costs” that Wal-Mart cited as an explanation for rolling back coverage. The median pay in America, according to new data, fell 1.2% to an unthinkable $26,364, or $507 a week. Meanwhile, millionaires and billionaires control close to 40% of the world’s wealth, according to a separate report. Millionaires and billionaires represent less than 1% of the population. So the idea that the Walton family, just protected from a 1/2 of 1% surtax by their house Senator Mark Pryor, can’t afford to give health care to the poorest of its workers, off of whose labor they make untold riches, just doesn’t pass the smell test.

One of the extra charges for Wal-Mart associates goes to smokers, who will have to pay $260 to $2,340 a year for the company’s health care coverage. This is an emerging trend with companies, who charge more for smokers. Insurance companies typically do this as well, as they consume more medical care.

Wal-Mart said that their decision had nothing to do with the Affordable Care Act, and they’re right, in a sense. That’s not how the pundits will spin it, of course, especially on the right. But it is true that the inability to fundamentally shift a broken health care system ends up often putting workers at the mercy of their employers when it comes to health care. That hasn’t changed, as Wal-Mart has shown.

Come 2014, when the exchanges go up and Medicaid expands, the theory is that these workers will have an opportunity to find alternate coverage. We have not yet seen that theory put into practice.

David Dayen

David Dayen