This is one of those fabulous unintended consequences of Obamacare:
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.
The mini-med plans are a way for a fast-food business, which employs many young, low-earning, high-turnover employees, to offer them at least something in the way of health insurance. What the present administration and Congress seem to neither know nor care is that decisions about such things are not generally arbitrary; they are based on financial considerations and real limitations.
Businesses—unlike government—have to make a profit or they will go out of business. Likewise, insurance companies, which are a type of business. Most business people are not evildoers out to screw their employees, although such types certainly do exist. But to merely declare a rule should be implemented is not the same as to make it possible for a business to implement it without losing a significant amount of money. And businesses are not in the business of committing suicide.
Aetna, the company that writes the policies for McDonald’s and many other large corporations (such as Home Depot and Staples) that offer similar deals, has declined to comment. But this guy has something to say:
“There is not any issuer of limited benefit coverage that could meet the enhanced MLR standards,” said Neil Trautwein, a vice president at the National Retail Federation, using the abbreviation for medical loss ratio.
Ah, but Obamacare will take up the slack, right? Wait; not so fast. Because of the delayed-action effect of the HCR bill, designed to allow the CBO to score it so that it could pass muster, the provisions that might do so (and that we all will pay for) won’t kick in till 2014. Till then, “workers on mini-med plans would have few affordable alternatives for coverage.”
Good going, Obama, Pelosi, Reid, and company. Of course, it’s possible that McDonald’s and Aetna will get a waiver. But don’t sit on a hot stove till they do:
Federal officials say there’s no guarantee they can grant mini-med carriers a waiver. They say the answer may not come by November, when many employers require employees to sign up for the coming year’s benefits.
The government is waiting for the association of state insurance commissioners to draft recommendations. The head of the association’s health-insurance committee, Kansas Insurance Commissioner Sandy Praeger, said she doesn’t think these types of mini-med plans deserve an exemption.
[NOTE: For those who do the math and find the premiums for these mini-med plans very high compared to the benefits, that is correct. But the policies are voluntary, as far as I know. No one is holding a gun to their heads and forcing employees to take them. And for a worker who believes he/she will incur medical bills that are higher than the premiums will be, they represent a savings.]