McD's May Cancel Insurance due to ObamaCare

Discussion in 'Politics' started by madanthonywayne, Oct 1, 2010.

  1. madanthonywayne Morning in America Staff Member

    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.

    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.
    Read the Rest:
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  3. Repo Man Valued Senior Member

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  5. madanthonywayne Morning in America Staff Member

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  7. kmguru Staff Member

    There is no Obamacare until 2014, In 2013, it will be repealed by the Republicans.
  8. madanthonywayne Morning in America Staff Member

    Various provisions come into effect sooner. Of course, I hope you're correct about it being repealed prior to full implementation.
  9. Pandaemoni Valued Senior Member

    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. joepistole Deacon Blues Valued Senior Member

    You use to be able to trust The Wall Street Journal before it became an appendage of Fox News.
  11. jmpet Valued Senior Member

    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!"
  12. joepistole Deacon Blues Valued Senior Member

    Not that it matters to you jmpet, but McDonalds is not dropping its healthcare. The Wall Street Journal story was flat out wrong. If you read this thread you would know that.

    Two, under the so called Obamacare plan there is no national healthcare system. It is all privately administered.
  13. jmpet Valued Senior Member

    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.
  14. IamJoseph Banned Banned

    McD's May Cancel Insurance due to ObamaCare.

    Why not cancel the latter and leave the former?
  15. joepistole Deacon Blues Valued Senior Member

    LOL, I am not interested in you ass. I am interested in some honesty. Please explain you comment then. What makes you think big busienss is going to start dropping people 100k at a time?

    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?
  16. Gypsi Registered Senior Member

    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.
  17. nirakar ( i ^ i ) Registered Senior Member


    Something is really screwed up here. I don't care how high the turnover rate is I don't see why an Insurance company can't manage to use 85% of premiums for paying for medical expenses. What are they doing, researching every employee looking for pre-existing conditions? Are they frivolously denying claims and then spending the premiums on fighting with doctors and patients?

    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.
    Did you forget that Rupert Murdoch acquired the Wall Street Journal. What news source could I just believe? Certainly nothing associated with Murdoch. The entire political right has low standards. The New York Times has proved itself untrustworthy.

    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: Oct 2, 2010
  18. nietzschefan Thread Killer Valued Senior Member

    U.S is so fucked.
  19. pjdude1219 screw watergate i want to know about zaragate Valued Senior Member

    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
  20. nirakar ( i ^ i ) Registered Senior Member

    Repo Man's link 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.

    The Medicaid expansion under Obamacare will be like selling McInsurance. Medicaid is McInsurance now because doctors who take Medicaid usually practice McMedicine in order to not lose money.
  21. Ganymede Valued Senior Member

    You really think they'll get the 67 Senate votes needed to repeal Healthcare reform. Please.

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  22. madanthonywayne Morning in America Staff Member

    No, the issue is that ObamaCare regulations make their current "minimed" plans illegal. They can not continue to offer those plans unless granted a waiver.

    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.

  23. Repo Man Valued Senior Member

    So what are the facts here?

    Murdoch enlists McDonald's in war on "Obamacare"

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