A promise he couldn’t keep

Matthew Hoy
By Matthew Hoy on September 30, 2010

A memo acquired by The Wall Street Journal today revealed that McDonald’s would have to drop the limited health insurance it offers to 30,000 employees because of the rules 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.

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.

Democrats who drafted the health law wanted the requirement to prevent insurers from spending too much on executive salaries, marketing and other costs that they said don't directly help patients.

The Department of Health and Human Services types have indicated that they’d likely give McDonald’s a waiver – once they get around to writing the regulations McDonalds will need a waiver from.

It’s this sort of thing that illuminates two different statements made by major proponents of the bill.

First, when Nancy Pelosi said that they had to pass the bill to find out what was in it – well, she suggested that was a good thing. Anytime a politician says anything like that you should never pass it, because it’s obvious that the aforementioned politician doesn’t know what’s in it either.

Second, Obama’s promise that you could keep the insurance you had was an empty one.

4 comments on “A promise he couldn’t keep”

  1. Though the White House professes outrage, I believe this is exactly what they are hoping will happen. Companies will start dropping certain coverage for some employees and good old Uncle Sam will ride in to plug the gap. Next thing you know they will have their government run, single payer, socialized health coverage. They will have won and the citizens will have lost. How did we ever let this happen? Let us hope we can throw the bums out starting this November.

  2. The professed outrage fits with the plan you outline, Mike. Corporations can't be trusted, so that's all the more reason (supposedly) for a larger government role in controlling both corporations and health care. Big business is bad, mmm-kay?

  3. It is easy to predict how this will play out. Already many companies and health insurers have gone hat in hand to the government asking for waivers from the unclear regulations that have yet to be promulgated. I am willing to bet that waivers will be granted not on the basis of the underlying economic case, but by which industries and companies are in Obama's good graces.

    This system is already corrupt and will only become more so.


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