The Wall Street Journal is reporting that McDonalds Corporation may be forced to drop medical coverage for nearly 30,000 hourly restaurant workers, due to new ObamaCare regulations that stipulate the percentage of premiums that insurers must apply toward medical care.
McDonald's provides its workers with low cost "mini-medical" plans that allow users to only pay a small copay for routine medical services and prescription medications. Mini-medical plans are a good fit for the McDonalds workforce, which is generally young and in good health, and which generates a high annual turnover rate.
Starting next year, ObamaCare will require insurers for large corporations to pay 85% of premium revenue toward medical care expenditures. But for companies like McDonalds, it is difficult, if not impossible, for insurers to achieve such a high ratio because of the large number of small-dollar claims generated by mini-medical plans, and because of the administrative costs associated with high employee turnover.
Unless BCS Insurance Group, which provides the medical coverage for McDonald's hourly employees, is granted a waiver by the Department of Health and Human Services, McDonald's may be forced to explore other options, including finding a different insurance provider, changing the benefits it offers, or possibly scrapping medical benefits altogether. McDonald's officials say that such a move would only be the final option, because the company is committed to providing salaries and benefits to its hourly employees that are competitive with those offered at entry-level by other major retail and fast food firms.
Of course ObamaCare is supposed to expand Medicaid coverage and government health insurance subsidies for low income wage earners, but those benefits won't be available until 2014. Until then, entry-level and hourly employees that earn at or near minimum wage will be in limbo, and probably have little hope of "keeping their original health plan."
Yet another example of how ObamaCare is continually failing to deliver on its pie-in-the-sky promises.
(Per the comments, I have clarified the first paragraph)
Last Friday, the National Association of Insurance Commissioners--the association of the 50 state insurance commissioners--issued its draft guidelines (PDF) for how insurers will need to calculate "medical-loss ratios," or MLRs ... And the news is not good: the MLR regulations are likely to lead to a significant disruption of the health insurance market, with many insurers exiting the market, driving premiums up and choices down.
And this isn't just my opinion. Maine Superintendent of Insurance Mila Kofman wrote a letter to HHS Secretary Kathleen Sebelius, asking Sebelius to waive the MLR rules for Maine until 2014. "One insurer has indicated its intent to pull out of individual markets (and has explicitly named one state where that decision has already been made)," wrote Kofman. "Prior to 2014, implementation of an 80% medical loss ratio requirement may destabilize the individual health insurance market in Maine." Maine currently has a state MLR requirement of 65 percent; eliminating 15 percent of an insurer's budget in three months is no small task.
There are other troubling elements in the NAIC report, including a recommendation to bring the 85% MLR threshold into play for any business with 50 or more employees, and the exclusion of claim reviews, fraud investigations, and due dilligence investigations from expenses that can be factored into the MLR calculation.
Can anyone explain how any of this is helpful in any way to workers who receive employer health benefits?