09-30-10, 11:14 PM #1
McD's May Cancel Insurance due to ObamaCare
McDonalds officials have informed federal regulators that unless they receive a waver from Obamacare requirements that insurance companies spend at least 80 to 85% of revenue on medical care they'll be forced to cancel insurance benefits for thousands of hourly employees.
And McDonalds isn't the only company likely to be canceling insurance benefits for low wage employees due to new regulations under Obamacare. Workers all over the country may soon be seeing their health plans dropped.
Unintended consequences of meddlesome government regulations. Clearly low wage employees are better off with insurance from a company that spends less than 85% of its revenue on medical procedures than with no insurance at all.
Furthermore, could someone please remind me which article of the constitution it is that gives the federal government the authority to dictate how a private business spends its money?
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.Read the Rest:
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.
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.
09-30-10, 11:31 PM #2
OAK BROOK, Ill. – The fast-food restaurant chain McDonald's Corp. has denied a report that it's considering dropping health care coverage for some employees in response to a health care reform provision.
The Wall Street Journal reported Wednesday that McDonald's, the world's largest hamburger chain, has warned regulators it could drop its plan for some 30,000 workers unless the government waives a new requirement in the health care overhaul. The paper cited a memo from McDonald's to federal officials.
The paper said that last week, a top McDonald's official told regulators its insurance plan won't meet a requirement for next year that it spend at least 80 percent to 85 percent of its premium revenue on medical care.
McDonald's said Thursday in a statement it has been speaking with federal agencies to understand the law, but the company called reports that it planned to drop health care coverage for employees "completely false."
09-30-10, 11:39 PM #3
10-01-10, 12:23 AM #4
There is no Obamacare until 2014, In 2013, it will be repealed by the Republicans.
10-01-10, 01:22 AM #5
10-01-10, 04:05 AM #6
I think it would be great to end employer funded health care. Employers are no better at picking an optimal health insurance plan for employees than the government is at providing or contracting to provide services to taxpayers. The economics are clear, in the absence of a significant externality or other market failure, interfering with the market interaction between customer (the person who gets insurance) and supplier (the insurer) is likely to be inefficient. It doesn't matter whether it's the government or a private third-party who's interfering.
At least the government has the goal of providing a good policy, though. Employers generally just want the cheapest policy that will be acceptable to the workers. The insurers, then, cater to that demand, not the demands and desires off the insured. The insured are just an obstacle...and there is no reason to woory too much about their satisfaction with your service, since they have no ability, in general, to convince the employer to change carriers. Best they can do is quit, and the only ones who'd quit to get better insurance...are the ones who are really sick--and employers really have no incentive to keep the really sick, since they tend to be less productive.
10-01-10, 07:35 AM #7
10-01-10, 11:05 PM #8
I look forward to McDonalds dropping healthcare. And I definetly look forward to Walmart cutting healthcare.
Because it's called PROGRESS.
A country with a national healthcare system no longer needs to suck the teet of Big Health... it gets health from Uncle Sam.
"Wow- someone's dropping healthcare! I gotta start a thread sensationalizing it!"
10-01-10, 11:08 PM #9
Two, under the so called Obamacare plan there is no national healthcare system. It is all privately administered.
10-01-10, 11:15 PM #10
joepistole- I am not gay. Hope that cutrails the obvious. If not- GET OFF MY ASS.
I was making an open statement: Obamacare really kicks in when big businesses start dropping people from healthcare 100,000 at a time. It was a comment to the OP.
10-01-10, 11:19 PM #11
McD's May Cancel Insurance due to ObamaCare.
Why not cancel the latter and leave the former?
10-01-10, 11:49 PM #12
For several decades now employers have been shifting the cost of heatlhcare from themselves to their employees and in some cases eliminating heatlhcare altogether.
So how is that any different from what would or could occur under Obamacare?
10-02-10, 12:35 AM #13
Healthcare insurance industry is already doing very well (just Google "health insurance industry profits") and they'll be set to do even better with a significantly larger customer base combined with lower costs (due to more efficient use of healthcare resources, a whole whack of anti-fraud measures and the release of many generic drugs, due to hit in a couple of years).
Employers will have access to affordable insurance options via State Exchanges. This includes small businesses, meaning that countless businesses will be adopting, not dropping, employee insurance.
10-02-10, 01:08 AM #14
Do they spend all their money advertising and trying to get McDonald's employees to buy a stupid rip off plan that is not even worth having? The article says,"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." That would not be a good deal for a 19 year old male especially if there are co-pays. Those annual coverage limits are too low to cover serious illnesses.
Maybe McDonalds is quietly happy about Obama-care because they knew that they would like to end their insurance program anyway and were just waiting for their employees to be eligible for some sort of insurance subsidized by others.
Edit, Oh wait now I have read the rest of the thread.
The more partisan left is not trustworthy. The mushy centrist media never fact checks they just repeat whatever everybody else is saying but at least they rarely make up their own lies.
Well I still have some faith in the Atlantic Monthly and the Christian Science Monitor. Even the Atlantic Monthly and the Christian Science Monitor get fooled from time to time but at least they make a decent effort to be accurate.
Last edited by nirakar; 10-02-10 at 01:45 AM.
10-02-10, 01:13 AM #15
10-02-10, 10:53 AM #16
it seems to me from reading Mad's post that Mcdonald's is just using the new regulations as an excuse to not provide health care
10-02-10, 03:27 PM #17
http://news.yahoo.com/s/ap/20100930/..._s_health_care had McDonald's saying that the Wall Street Journal story that Mad linked to was wrong.
I do expect small employers of low income people like McDonalds Franchises to stop contributing to their employees medical costs because it will make more sense for the working poor to be subsidized through ObamaCare than for the employers to subsidize the purchase of insurance. I think McDonald's franchises are small enough that they will not be penalized for not offering to subsidize insurance purchases under Obamacare. Small employers can also make sure to keep their employees hours just under the full time official employee number of hours worked per week.
The ending of the current selling ripp-off plan McInsurance is nothing to grieve over.
A very informative web page for trying to figure out what Obamacare means for small employers.
MacDonalds Mini-med Plans a Rip-off and Will Be Obsolete in Two Years
News Type: Opinion — Fri Oct 1, 2010 1:30 PM EDT
politics, reform, health-insurance, wsj, hhs, macdonalds, benfits, min-med, sebillius
By Man of Knowledge
McDonalds workers will be able to get a far better comprehensive health insurance plan in 2014 on a health insurance exchange with no benefit caps than the McDonalds Mini-med insurance plans.
Here is a breakdown of the MacDonalds Plans as published in the WSJ.
Low Cost Plan
* Weekly insurance premium $13.99
* Yearly premium $727.48
* Maximum yearly benefit $2000
* Plus each visit to primary care or specialist requires $20 copay
* There is a $5 drug copay for generics and a $50 copay for brand name drugs
* Policy covers 70% of inpatient hospital care.
Medium Cost Plan
* Weekly insurance premium $24.30
* Yearly premium $1263.60
* Maximum yearly benefit $5000
* It includes the same copays as the lower cost plan but includes $1500 coverage for outpatient hospital care.
High Cost Plan
* Weekly insurance premium $32.30
* Yearly premium $1679.60
* Maximum yearly benefit $10,000
* It includes the same copays as the lower cost plan but includes $2000 coverage for outpatient hospital care.
According to the Kaiser Family Foundation Subsidy calculator for comprehensive health insurance costs in 2014.
A Single person, age 19, earning $22,400 wage ($10/hour full time) can purchase a comprehensive Silver level health insurance plan on an insurance exchange at the cost of $1,357 that is $24/week, with a maximum out of pocket cost of $2083 and no benefit caps.
Which would you prefer?
10-02-10, 04:04 PM #18
10-03-10, 01:40 PM #19
The Wall Street Journal has responded to the charges that their story was incorrect:
At a Christian Science Monitor breakfast Thursday, HHS Secretary Kathleen Sebelius claimed that the Journal story was "flat-out wrong," adding that "I'm sorry that they were not more accurate in their reporting." If only for the sake of her own credibility, at some point Ms. Sebelius is going to have to try to persuade people who actually know something about the industries she regulates.
In a statement, McDonald's did say that it was "completely false" to suggest that "we plan to drop health care coverage for our employees," and "regardless of how the regulations evolve over the next several months, McDonald's is committed to providing competitive pay and benefits." No doubt that's true: McDonald's will still need to attract workers—not to mention that corporations of its size and brand recognition are very sensitive to political intimidation.
But McDonald's didn't deny that the new rules will wipe out its existing plans. And that's precisely the point. The entire philosophical and policy architecture of ObamaCare is explicitly designed to standardize health benefits and how those benefits should be paid for. Those choices and tradeoffs will be made for everyone by Ms. Sebelius's regulators.
At issue in the McDonald's dust-up is a type of low-cost, low-benefit insurance known as "mini-med." These plans cover most medical services but generally have an annual deductible or benefit cap between $1,000 and $10,000. Unlike more comprehensive plans, there's no catastrophic coverage. Essentially, the very low premiums—under $100 a month—amount to prepaying for routine expenses like office checkups and E.R. visits.
Around 2.5 million consumers are covered by "mini-med" policies, most of them concentrated in low-wage industries like fast food, hospitality and retail that have large numbers of part-time or temporary workers. In the case of the restaurants, 75% of the workforce turns over every year and nearly half are under age 25. Mini-med plans are a temporary stopgap for businesses that have low margins and face high labor and health costs.
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. McDonald's may eventually offer the high-cost plans that Ms. Sebelius favors, or get its waiver, but many of its less profitable or smaller competitors won't. While subsidized ObamaCare options will be available in 2014, those costs will merely be transferred to taxpayers.
Ms. Sebelius facetiously called the Journal "my favorite newspaper" at the Monitor breakfast, and she'll no doubt continue to shoot the messenger. What everyone else should understand is that the almost daily damage we're seeing as this law takes effect is not unintended. It is the heart and soul of ObamaCare.
10-03-10, 02:10 PM #20
So what are the facts here?
Murdoch enlists McDonald's in war on "Obamacare"
The Affordable Care Act includes a regulation that requires insurers spend 80-85 percent of the cash raised by premiums on actual healthcare, rather than on cushy salaries for insurance company executives and other overhead. The Journal got its hands on a McDonald's memo sent to federal regulators asserting that it would be "economically prohibitive for our carrier to continue offering" one of its plans without an exemption from the rule.
And that's really it. A big corporation is trying to squeeze out of a new health care rule by threatening to drop coverage for its workers. It's hard to imagine a more predictable response to reform....
....The McDonald's plan in question, part of a class of plans referred to as "min-meds" is an example of the kind of broken healthcare insurance system that the Affordable Care Act is intended to fix. For 14 dollars a week, employees get about $2000 worth of coverage for a whole year. For $32 dollars, the plan maxxes out at $10,000. This is, of course, worthless for a worker who comes down with any kind of serious medical condition. One of the reasons we need a better healthcare insurance system is because underinsured workers end up costing society more than if they had adequate coverage -- and low paid McDonald's employees are exactly the kind of workers who are likely to be most devastated by the financial hit of a major health calamity.
By 2014, cheap-rate bottom-of-the-barrel health plans of this sort will cease to exist, as they will not meet the requirements of the Affordable Care Act. By that point, Americans will theoretically have the opportunity to buy more comprehensive healthcare through the ACA-mandated Health Care Exchanges.
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