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McDonald's vs. health-care reform

I've gotten some questions about the Wall Street Journal story saying the new heath-care law will force McDonald's to stop offering coverage. The short answer is that it won't, but it should. But anything I could write about it would just be duplicating Jon Cohn's work -- and probably doing a worse job of it. So read him.

By Ezra Klein  | September 30, 2010; 11:00 AM ET
 
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Comments

$14 a week to get up to $2000 in coverage? That is an out-and-out scam.

Posted by: Hopeful9 | September 30, 2010 11:20 AM | Report abuse

hopeful9,

a scam? Really? How much should $14 a week get you in coverage? I'd love to hear your expansive knowledge that would actuarily calculate what the true costs would be?

did you read the article that stated that an ER visit can cost up to $10,000. ONE VISIT. Where is that money coming from when a person only pays $720 in premium a year??


Jon and Ezra are right. We'll probably get to a point where the admin realizes that the loss of coverage until 2014 is more problematic than having them adhere to the MLR but then what happens when other employers cry foul that they're not offered the same benefits. What about when other employers in similar low pay industries don't get the same treatment??? How loud will their cries be and how will they be heard?

and AGAIN the true cost drivers get glossed over.

Posted by: visionbrkr | September 30, 2010 11:30 AM | Report abuse

oh and Jon is wrong about one thing though.

"For now, some fast-food workers can take advantage of the law's early benefits, like the temporary insurance plans for people with pre-existing conditions that the administration and the states have been starting"


If he's talking about the high risk pools not only are they not available to all (remember you have to be uninsured for 6 months) but they're also wildly unaffordable especially for someone making minimum wage.

Posted by: visionbrkr | September 30, 2010 11:33 AM | Report abuse

117 million people (some employed, some children and family members of the employed) seem to think that something is better than nothing. The alternative to mini-meds is nothing -- at least until 2014, when many (but not all) of the working poor become involuntary wards of the Medicaid program and able to see any available physician willing to accept new Medicaid patients.

The 30,000 McDonald's employees harmed by the Obama/Pelosi PPACA are joined by the employees of thousands of smaller, less attention-getting, employers around the nation: no employer wants to cut coverage, but most must do so simply to comply with the new regulations.

A similar issue is emerging regarding the Obama/Pelosi regulatory definition of "child," which at this point excludes foster children, adopted children, children raised by grandparents, etc. No employer wants to cut coverage of an adopted child, yet many must now do so to meet the demands of the Obama/Pelosi Regime.

Perhaps it's time to reconsider the PPACA. The story of Moses comes to mind: Pharaoh didn't readily believe the examples he was given and didn't readily answer the call to "Let my people go." [Pharaoh ultimately had a change of heart.]

Posted by: rmgregory | September 30, 2010 11:43 AM | Report abuse

Who works at McDonalds? Mostly healthy young people who, in my state, can obtain high deductible insurance with $35 copays and $1 million benefit cap for $22.50 per week. (as I have pointed out many times before, equivalent to what they pay for their ubiquitous iphones) As for those who are not healthy young people, I suspect that if they work for McDonald's, most of them qualify for Medicaid or their parent's insurance.

Posted by: bgmma50 | September 30, 2010 11:57 AM | Report abuse

From the article "In the long run, McDonald's employees need policies that protect them in case of serious medical problems."

The target keeps moving. They need policies that protect them in case of serious medical problems, but are high deductible insurance with high lifetime benefits good enough? Nooo. You see, they also need policies that encourage them to seek medical assistance at the first sneeze, just in case. Plus they need preventative care. And, of course, they need to preserve their family's assets. And it needs to be affordable.

Posted by: bgmma50 | September 30, 2010 12:04 PM | Report abuse

Jon's rant is just that it didn't get subsidies to purchase insurance fast enough.

The ways to resolve that:

1- tax the rich more and sooner
2- lower the amount paid to doctors more


Neither one was happening politically. A public option priced at the same or even slightly lower levels than private insurance does no good here no matter how much liberals whine. More nipping at the edges of costs.

Posted by: visionbrkr | September 30, 2010 12:16 PM | Report abuse

"Most likely, then, McDonald's employees who like these plans will get to keep buying them, at least for the immediate future.

But is that a good thing?"

It is according to the person voluntarily making the purchase. We might look down on their car purchase too, but they thought it was worth the money and frankly, it isn't any of our business is it?

"$14 a week to get up to $2000 in coverage? That is an out-and-out scam."

Unless you expect to use $2,000 in services - then you get $2,000 for $728. Not a lot of protection but hard to call what can amount to a 60%+ discount on purchases a 'scam'.

Posted by: justin84 | September 30, 2010 12:21 PM | Report abuse

Giving a product the name "insurance" does not make it an insurance product.

Posted by: ideallydc | September 30, 2010 12:22 PM | Report abuse

This is what happens when liberals try to enforce their 1 size fits all rule.

The point of these types of plans are to ensure that these workers can get coverage for basic checkups and routine preventative care. You know, the stuff that Obama touts as great.

And it works fine for 85% of people who don't even hit the limit.

Posted by: krazen1211 | September 30, 2010 12:42 PM | Report abuse

"Giving a product the name "insurance" does not make it an insurance product."

And saying, 'no new taxes for those under $250k' doesn't actually mean 'no new taxes'.

But why get hung up on semantics?

Posted by: krazen1211 | September 30, 2010 12:43 PM | Report abuse

"If you like your current insurance, you keep that insurance. Period, end of story."

- President Barak Obama, July 18, 2009

http://www.whitehouse.gov/the_press_office/Weekly-Address-President-Obama-Health-Insurance-Reform-Will-Strengthen-Small-Businesses/

Posted by: jnc4p | September 30, 2010 12:54 PM | Report abuse

Well, Kid Ezra, others have the solution, so why don't you read them --

http://IMPEACH-OWEbama.com

Posted by: russpoter | September 30, 2010 1:01 PM | Report abuse

It's laughable seeing the right-wingers here now pretending to worry about people losing health coverage. Where were you when the fates of millions were on the line?

McD's is now denying the story. Must be the corporate media trying to hurt the Dems.

In related, but more serious news, wellpoint is spending almost one million dollars to help the GOP win the 2010 election.

Hate to say it, but it now looks like that Citizen's United is going to ensure 2008 will be known as the last time Dems win an American election. I hope all you foolish know-nothings commenting here are happy with the lunatic goons you are putting into office in Nov because we are going to be dealing with the INTENDED CONSEQUENCES of their incompetence and ideology for a very long time to come.

Posted by: lauren2010 | September 30, 2010 1:36 PM | Report abuse

I am surprised mcdonald's isn't telling employees to purchase charity care insurance..no paperwork,no payments,excellent care..just show up at a hospitals emergency room and the hospital will cover you under their charity care policy better then any insurance policy..no deductibles or co-pays..hospitals are concerned about their tax exemption so charity is at an all time high..the house of cards are starting to fall..

Posted by: notmd | September 30, 2010 2:15 PM | Report abuse

I am surprised mcdonald's isn't telling employees to purchase charity care insurance..no paperwork,no payments,excellent care..just show up at a hospitals emergency room and the hospital will cover you under their charity care policy better then any insurance policy..no deductibles or co-pays..hospitals are concerned about their tax exemption so charity is at an all time high..the house of cards are starting to fall..

Posted by: notmd | September 30, 2010 2:18 PM | Report abuse

So, we're going to provide really good, and subsidized, insurance to lots of people who don't make a lot of money, AND we're going to save lots of money in the process. Sure.

Posted by: ostap666 | September 30, 2010 2:24 PM | Report abuse

"So, we're going to provide really good, and subsidized, insurance to lots of people who don't make a lot of money, AND we're going to save lots of money in the process. Sure."

That's not quite right. Indeed, it doesn't even come close.

Here's a more accurate summary: We're going to make sure almost everyone has insurance, and most people will pay for it themselves, and insurance companies won't be allowed to rip anyone off or deny valid claims, and a small percentage of people hard on their luck will be subsidized, and some current and future enhancements to the system will work toward making sure that costs don't get unmanageable in the long term.

Posted by: lauren2010 | September 30, 2010 2:47 PM | Report abuse

I'd be curious to know what the McDonalds medical loss ratio actually is -- it's an incredibly crappy plan that doesn't provide comprehensive coverage but it also sounds like McDonalds wastes a whole lot of the money employees pay for the insurance on admin. They're a smart organization so I don't doubt that they'll be able to find a way to reduce the admin fees to continue providing this crappy coverage.

Posted by: wswest | September 30, 2010 2:48 PM | Report abuse

lauren2010,

you do know that insurers deny less claims than medicare right? Sorry if that doesn't fit your agenda.

oh and who gave you the right to give subsidies to millions upon millions of people? You know people won't pay more than 8.5% of their AGI towards healthcare right? So in effect they won't be paying it, they'll be paying a portion of it and the federal government (paid for by OUR tax dollars) will be paying the rest.

that's why some cry about redistribution of wealth.

Sorry but facts are facts and you don't get a right to your own set of them.

Posted by: visionbrkr | September 30, 2010 3:18 PM | Report abuse

wswest,

its obviously less than 80% and less enough than that to make them believe they can't make it up by tinkering around the edges. I'm not saying you are but i love how some blame insurers for this. At 29000+ employees its self insured meaning there is no insurance company skimming profits, only providing a network for discounts for a small fee per employee.

Most people have no clue if you're not in HR what the cost to administer a plan is with all the federal regulations (COBRA, HIPAA etc) and when you've got as high of turnover as they do you as an administrator have to spend most of your day explaining the basics to someone who isn't going to understand it 5 minutes after you say it.

Posted by: visionbrkr | September 30, 2010 3:23 PM | Report abuse

Our insurance rates are high because hospitals--who have to treat people with or without insurance--raise their rates (paid mostly by insurance companies) to cover losses incurred by treating those without insurance.

Mini-meds don't help the situation. When someone ends up in the hospital, it is guaranteed that their bill will wind up over $2k. Then we (people with "real" insurance) are back to subsidizing those people.

Like it or not, one way or another, we're all subsidizing each other's health care. There is just no way around it (other than abolishing insurance and medicare/medicaid and making it fee-for-service).

Posted by: nickthap | September 30, 2010 3:31 PM | Report abuse

"oh and who gave you the right to give subsidies to millions upon millions of people?"

Congress has been subsidizing one thing or another since Alexander Hamilton was Secretary of the Treasury (that would be from the very start of government under the Constitution, in case you don't recognize the name). So while the wisdom of any given subsidy is certainly open to debate, the well-established right of the Federal government to establish them really is not.

Posted by: zimbar | September 30, 2010 3:37 PM | Report abuse

zimbar,

my bad. I meant to ask Lauren who gave you the right to REMOVE the subsidies given to people come 2014 but it obviously didn't come out right.

lauren said:

"We're going to make sure almost everyone has insurance, and most people will pay for it themselves,"

Many people won't pay for it for themselves. many will be subsidized (some heavily) to pay for care. I'll predict now that the next bout of health reform will be when the subsidies grow to the point where it chokes the economy as a whole. I'm thinking 2020 or so.

Posted by: visionbrkr | September 30, 2010 4:48 PM | Report abuse

"Here's a more accurate summary: We're going to make sure almost everyone has insurance"

Well, we'll reduce the uninsured population from 54 million to 23 million per the CBO. I guess that's "almost everyone", though it would be like covering the whole country except Illinois and Michigan, as opposed to not covering Illinois, Michigan and 3/4s of California under the status quo.

"and most people will pay for it themselves"

Each newly insured person will cost $5,262 per year in taxpayer money per CBO (up to $6,687 per year in 2019). Seems like a lot of people won't be "paying for it themselves".

"and insurance companies won't be allowed to rip anyone off or deny valid claims"

They already aren't allowed to deny valid claims. If they deny a valid claim it's breach of contract and you have legal recourse.

"and a small percentage of people hard on their luck will be subsidized"

So a family of four making $66,150/yr (300% of the federal poverty level) is now considered "down on their luck"? That's more than the median household income in this country. They get a $7,569 tax credit per the KFF calculator - that's more than this household's federal income tax liability!

"and some current and future enhancements to the system will work toward making sure that costs don't get unmanageable in the long term."

In other words, we continue to dilute price signals and hope some tinkering around the edges will offset the damage. We'll see how it goes.

Posted by: justin84 | September 30, 2010 5:07 PM | Report abuse

Sorry but McDonalds in NOT the cause of the diabetes and Obesity crisis as someone stated.

This takes the blame from the real cause which is the food chemicals that make billion$$$ while causing diabetes and and Obesity.

A filmmaker has been reversing diabetes and obesity in now 10 countries and the FDA and Billionaire drug companies keep this from the people

just google SPIRIT HAPPY DIET

Posted by: healing1 | September 30, 2010 6:44 PM | Report abuse

Hey Ezra,
Yeah, those 30,000 individual consumers are just so stupid to be buying such "crappy" policies. That's probably why their stuck in those minimum wage jobs. It's just so great that with the ACA, we could reduce their choice sets from stupid to nothing.
Steve

Posted by: FatTriplet3 | September 30, 2010 7:52 PM | Report abuse

People $14/week for $2000 max is biggest scam in healthcare history. There is no other way to see it. So, it's $768 in premiums for $2000 in max benefits, but what about copays and/or deductibles? Unless they were paying $14/week and for the first $2000 for free, it's a RIPPOFF, and should be exposed and put an end to. If conservatives want to defend these plans as the status health insurance that Obama is causing people to lose, BRING IT ON!

Posted by: jswarren | September 30, 2010 8:18 PM | Report abuse


You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price by calling 877-882-4740 or check http://bit.ly/bkys0B If you have health insurance and do not care about cost just be happy about it and trust me you are not going to loose anything!


Posted by: chloemia01 | October 1, 2010 7:05 AM | Report abuse

"Unless they were paying $14/week and for the first $2000 for free, it's a RIPPOFF, and should be exposed and put an end to."

Thankfully, the government isn't getting rid of these plans.

How on Earth is paying $727.48 for $2,000 a "rip-off"? Even throwing in co-pays for another $200 or $300, if you plan on having $1,500-$2,000 in health care expenses it's a good deal. You can pay $1,679.60 for $10,000 in benefits too - is that a rip off? How much more should someone be able to receive above and beyond premiums paid for it to not be a rip off?

The plans pay for 100% of primary care and specialist doctor vists with $20 co-pays, 100% of prescription drugs after a $5 co-pay, and $50 co-pay for brand, and 70% of inpatient hospital services.

Members presumably also benefit from being able to pay negotiated rates.

So let's say that your normal health care expenses range from $3,000 - $4,000. You can pick up the medium benefit plan ($5,000 max benefits), and pay ~$1,500 in premiums/co-pays. I say you are better off by $1,500-$2,500. How are you helped if the government effectively outlawed this plan, and told you "hey don't worry, help is on the way in 2014"?

Agreed that this isn't insurance in the proper sense of the word, but nonetheless it is a benefit that employees might find useful given their personal situation. We might not like this type of plan for ourselves, but it's none of our business if someone else sees value in it and wishes to join.

Posted by: justin84 | October 1, 2010 8:26 AM | Report abuse

One way to maximize their benefits would be if employees didn't eat the product.

Posted by: AaronKagan | October 1, 2010 12:00 PM | Report abuse

I am getting really tired of the President running around the Country to spread his lies about Health Reform.

"You can keep your Insurance", blatant lie. As an Employer I can assure you that the Majority of current Policies will not be "grandfathered" as for them to be "grandfathered under the Bill it has to meet a whole list of criteria.

Many policy provisions on that list aren't even necessary for all employers or their employees. And, wouldn't it be nice if the employees had the option of keeping their current coverage RATHER THAN seeing their premiums skyrocket due to adding coverage they neither need or want?

This is a scam.

The only thing worth keeping is the Insurance Regulation and reform that stops people from keeping their employer policy and coverage if they quit or are fired and don't want their new employers plan or for any other reason.
Newborns automatically covered with no pre-existing.

Coverage under family insurance up to age 26,although they failed to say once 27 can keep their coverage at same premium under individual plan.

Without requiring everyone to purchase insurance it is unreasonable to require Insurance Companies to provide coverage for individual plans where the individual or family(if applying for family coverage)when there is a pre-existing condition. Although, there should be regulations as to what can be considered pre-existing and the policy should still be issued minus coverage for the condition or disease.

Other then offering additional Prescription coverage to medicare patients by increasing the premiums paid to cover the additional costs; the rest of the costly Bill is worthless and will do little.

The cost of insurance has already started to skyrocket due to this Legislation and it will continue to increase at a MUCH faster pace then it ever would have.

You will either lose your coverage or pay more towards your group plan.

Posted by: fedupwithgovernment | October 2, 2010 12:18 AM | Report abuse

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