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The Spectacle Blog
McDonald’s has put federal officials on notice that it may have to drop health insurance for 30,000 employees unless it gets an exemption from a new requirement in the national health care law, the Wall Street Journal reports.
ObamaCare forces insurers to pay out at least 80 percent to 85 percent of the revenue they receive in premiums on paying out claims, a percentage known as the medical loss ratio. The problem is, that’s especially difficult to manage in so-called mini-med plans which offer scaled down benefits at a lower price, but have higher administrative costs due to a lot of worker turnover.
If the rule doesn’t get altered, its ramifications could be greater than McDonald’s — as there are 1.4 million people with mini-med plans.
The McDonald’s move is just the latest in a series of revelations that undermine the promises Democrats made when they were selling ObamaCare.
In May, burger chain White Castle announced that a separate provision in the law could cut its earnings in half, causing it to curtail expansion plans and slow hiring.
In June, an administration document revealed that more than half of those with coverage from their employers may have to change plans as a result of ObamaCare.
Earlier this month, insurers announced that they would have to raise premiums, partially as a result of new rules that force them to offer certain benefits.
And just this week, Harvard Pilgrim announced that due to new requirements and reimbursement rates under ObamaCare, they’d have to discontinue Medicare Advantage plans that currently serve 22,000 customers in Massachusetts, New Hampshire and Maine.
None of this is surprising and in fact was entirely predictable. It would be imposible to make sweeping changes to the health care system without disrupting current coverage. Even my prefered route, which would equalize the tax treatment of all health insurance, would likely mean that a lot of people would have to change plans. Ultimately, I think they’d end up better off, because we’d have a more competitive market, and they’d be able to choose a policy that suits their budget and medical needs, and they’d be able to take it with them from job to job. But the problem is that Obama and his allies spent more than a year explicitly promising that nobody would have to lose their current coverage from the health care legislation.
For instance, in June 2009, he told the American Medical Association:
(N)o matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.
That quote — and many more like it — will continue to haunt Obama and Democrats in the months and years to come.
UPDATE: McDonald’s is now disputing the report.
View all comments (17) | Leave a comment
More Blog Posts by Philip Klein
http://spectator.org/blog/2010/09/30/wsj-mcdonalds-may-have-to-drop
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bob| 9.30.10 @ 10:16AM
A little fact checking, please? According to Reuters, McDonald's officials called the report "completely false" this morning. What part of "completely false" is unclear to you?
JP| 9.30.10 @ 11:01AM
Bob,
The WSJ article quoted from the emails sent to Mr Larsen of the HHS - the bureaucrat who is handling the McDonald's case. The article also provided facts and figures pertaining to McDonalds health plan, including expenditures. How many more facts do you want?
Go back to troll land.
Warrior | 9.30.10 @ 11:28AM
Bob, please provide the link to Reuters that states this. I just did a quick search of the site and there was no mention of this being false as you stated.
DRed| 9.30.10 @ 12:47PM
http://abcnews.go.com/Politics.....d=11764596
Not Reuters, but there you go.
SoCon| 9.30.10 @ 1:39PM
ObamaCare--coming to a city near you!
Ronald McDonald| 9.30.10 @ 5:18PM
Nope its true. - - losing my healthcare because of Obamacare. Dont be so naive and gullable . . of course they're going to deny it. Durr.
But im here to clear things up.
JP| 9.30.10 @ 11:54AM
Philip,
Have you tried to call or email Steven Larsen, the HHS bureaucrat who received the emailed memo? Either McDonalds is lying, or he is. And if he did recieve the email, could he forward it to you?
It sure sounds like Micky Ds got a call from the HHS Capo herself. I could only imagine what was said.
Bruce Berger| 9.30.10 @ 2:59PM
I am sure Sebelius threatened to throw Ronald McDonald in jail if he persists in not saying that Obamacare is the single greatest thing that has happened in our lifetimes.
Larsen Rogers | 9.30.10 @ 1:38PM
http://www.aboutmcdonalds.com/.....ticle.html
Why don't you do research and get with WSJ and ask them to do research before posting a false article?
Ronald McDonald| 9.30.10 @ 5:12PM
Nope. this is fact. Obama "Care" . .or NON care, i should say, is screwing us.
Seems Mr Obama was wrong, our employees will NOT get to keep their healthcare. oops.
Interloper| 9.30.10 @ 5:21PM
Obama's not wrong, he never wanted you to have private health care insurance. He's just a liar.
SoCon| 9.30.10 @ 1:45PM
Oh, please; the destruction of the American private insurance industry is one of the main objectives of ObamaCare. How else can they ram SINGLE PAYER health care down our throats?
Stop the lies, liberals; Obama, himself, said single payer would take a while to implement.
TrustMe| 10.1.10 @ 11:35AM
Not much of a bargain to pay $728 for $2000 in annual coverage. This is how big business treats low paid workers; that's why we need healthcare reform.
Now - let's do the math to see just how much the insurance company is making off of these workers:
Let's be conservative and assume that each of these workers are opting for the smaller plan and paying $728 per year; annual premiums paid to the insurance company would be, at a minimum $21,476,000. Based on their request for a waiver, on the $750,000 minimum cap on annual benefit payouts, one can only assume that they are paying out less than $750,000 on $21,476,000 in insurance premiums; that's less than a 3.5% payout. Am I missing something? Is this fair?
Willey| 10.1.10 @ 5:13PM
Are McDonald's insurance progams mandatory? No. Are the government's? Yes. Why is that?
That's why we will NEVER trust you big government morons.
james| 10.4.10 @ 6:59PM
Can anyone explain why McDonald's will get an exemption? How does our political system work? The squeaky wheel gets the grease?
I thought that part of the point of the health insurance bill was to ensure that people got real coverage. While McDonald's mini-med program is better than nothing, it certainly doesn't come anywhere close to what the bill calls for.