under ObamaCare, a not-so-happy meal for McD's workers
From Janet Adamy in the WSJ...
McDonald's Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.
The move is one of the clearest indications that new rules may disrupt workers' health plans as the law ripples through the real world.
Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn't loosen a requirement for "mini-med" plans, which offer limited benefits to some 1.4 million Americans.
The requirement concerns the percentage of premiums that must be spent on benefits.
While many restaurants don't offer health coverage, McDonald's provides mini-med plans for workers at 10,500 U.S. locations, most of them franchised. A single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.
Last week, a senior McDonald's official informed the Department of Health and Human Services that the restaurant chain's insurer won't meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.
McDonald's and trade groups say the percentage, called a medical loss ratio, is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims....
McDonald's move is the latest indication of possible unintended consequences from the health overhaul....From the WSJ editorialists...
Among President Obama's core health-care promises was that Americans can keep their current coverage if they like it. Among the reasons that a new ObamaCare squall blows in every other day is that this claim simply is not true, as people are discovering....
But Democrats hate mini-med and other skinny-benefit plans, calling them "underinsurance." ObamaCare is meant to run them out of the market by mandating benefits, eliminating coverage caps and certain technical rules about how premiums must be spent. This despite the fact that Arkansas, Connecticut and Tennessee sponsor their own mini-med plans for state residents as better than having no insurance at all.
In other words, the choice is between relatively affordable coverage that isn't as generous as Democrats think it should be and dumping coverage entirely....
posted by Eric Schansberg @ 11:49 AM
6 Comments
6 Comments:
McDonald's workers can't keep their coverage, seemingly in violation of Obama's promise that everyone can keep their coverage if they like it. But one wonders how much they really like their coverage. A $2000 limit on annual benefits? That's appalling. One imagines mini-med plans are sufficient to keep their workforce on the job through minor aches and pains. But if a worker has a serious health problem (cancer, say), they're not going to be able to work, and McDonald's is perfectly content to discard them and let the public pay for their coverage via Medicaid (after, of course, they spend down their net worth in order to qualify).
And do we take the insurers' and McDonald's word that they are unable to meet the 80% threshold for premium revenue spent on medical care? After collecting $728 per year in premiums for a maximum of $2000 of annual benefits? Can I be forgiven for suspecting that this is a profit item for them?
Well if Obamacare forces McDonald's into bankruptcy, a whole lot less people will be collecting benefits of any type, although more than likely we will all simply have to kiss the dollar menu Goodbye and say Hello! to $10 Big Macs. We the people, will pay either way, and business and the economy will be suffer.
Obamacare puts a Bandaid on the symptom but leaves the disease unchecked and open to metastasize.
McDonald's is doing more than most employers, who have no such option for "hourly" workers.
Jenna, if McDonald's is unable to provide adequate coverage to their workers, then that's something the government will have to provide. Perhaps Mitch Daniel's Healthy Indiana Plan, which combines health savings plans with subsidized catastrophic care coverage, would work. But there are burger chains that do provide good health coverage to their employees—In-and-Out Burger, a popular southern California chain, gives all full-time employees health coverage and other benefits. In-and-Out Burger, by the way, is a family-owned business owned by Christians. They put little Bible verses on burger wrappers.
William, I think we are talking apples and oranges --
Most "hourly" employees are part-time and employers do not routinely provide healthcare for these individuals (of which I am, by the way). No option for me to get medical coverage because I am not "full-time". Yes, most employers including McDonalds & Burger In-andOut, provide coverage for full-time people.
Forcing businesses to provide major medical coverage for transient workers who may only put in 40 hours/month is not going to solve the core problem of the runaway healthcare costs that are bankrupting our country. In fact, Obama is going to make it worse. Lower quality healthcare at higher cost - with the govt in charge -- and a languishing economy on top of that!
My dad owns a restaurant in a small town which employs about 25 people. He says depending on how this plays out, he end up closing up shop and turning his establishment into rental space - a lot less headaches (taxes, mandated healthcare costs) and probably more money.
He was raised as a Christian but maybe it's not really deep down in his heart.
If Obamacare does come to rack and ruin, I hope a reform such as the Healthy Indiana Program gets enacted. An ideal health care system should be founded on several principles: it should be efficient (it should save money, or at the very least, stop the increase in costs), it should rely on private enterprise as much as possible, it should provide good care, and it should require people to take responsibility for themselves. (So nothing should be just given to people, people must buy their own coverage if possible. This will require a subsidy to help the working poor, which the Healthy Indiana Program includes.) What I hope does not happen is that we return to the status quo ante, under which costs continued to escalate but many people were left without coverage—including hard-working people with good incomes who are willing to buy coverage but can't find it (due to pre-existing conditions).
William, you almost sound like a Libertarian! :)
Healthcare is a gargantuan gorilla of a problem. Easy answers are hard to come by. It seems we agree that significant paradigm shifts and reforms are needed.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home