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Thanks, Obamacare: McDonald’s To Drop Health Plans For Workers; UPDATED: McDonald’s Denies The Story

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Thanks, Obamacare: McDonald’s To Drop Health Plans For Workers; UPDATED: McDonald’s Denies The Story

In the most unsurprising news of the day, McDonald’s has sent a strong message to the federal government. Most Americans understood that nationalizing health care would lead to employers who previously offered health plans to stop offering them altogether. McDonald’s is warning federal regulators that they will drop health plans for tens of thousands of workers if regulators don’t waive requirements from Obamacare.

McDonald’s Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.

The move is one of the clearest indications that new rules may disrupt workers’ health plans as the law ripples through the real world.

Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn’t loosen a requirement for “mini-med” plans, which offer limited benefits to some 1.4 million Americans.

The requirement concerns the percentage of premiums that must be spent on benefits.

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 mini-med plans that McDonald’s offers is unique for a restaurant, as the article mentions. If you’ve ever worked as a server in a restaurant (like me), you’ll know that very few restaurants offer any kind of health insurance, unless you’re promoted to management. And now, thanks to Obamacare, those mini-med plans will be taken away from workers, leaving them no affordable alternative. (But remember, big corporations like Wal-Mart and McDonald’s are evil and the government is just trying to protect you from them.) Sadly, McDonald’s isn’t the only company that offers these plans — and will likely be forced to stop offering them. Disney, CVS, Blockbuster, Home Depot, and Staples are all companies that offer similar mini-med plans, and they all might find themselves in a similar position soon. These plans are amazing for people who work low-skill, entry-level jobs, jobs that don’t usually offer any health plans at all. Obamacare is taking that away.

But hey, remember what we were promised? If you like your plan, you can keep it!

And what will happen now? Kathleen Sebelius is threatening “zero tolerance” for companies who refuse to toe the Obamacare line.

This has caused a brouhaha between insurers and government officials. Health and Human Services Secretary Kathleen Sebelius sent a threatening letter to insurers for explaining that the new mandated benefits will contribute to higher premiums.

“There will be zero tolerance for this type of misinformation and unjustified rate increases,” she wrote. She threatened to ban insurers from participating in the new government-run health insurance exchanges if they don’t keep quiet.

It is far from clear whether she has that authority, but the battle lines are drawn.

Battle lines, indeed.

UPDATE: McDonald’s is denying the report that they are threatening to drop health plans for almost 30,000 employees. Are they really not considering dropping the health plans, or is this damage control? Time will tell…

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  • Steve says:

    This is what critics of this health care “reform” have been saying. It’s the law of unintended consequences. When the clowns in D.C. voted for a bill without knowing what is in it, they proved their insanity.

    And then there’s Obama, Reid and Pelosi. How much more can we take of their lies?

  • Chris M-G says:

    In the land of rainbows and unicorns, a democrat cannot tell a lie and a republican cannot tell the truth. That pretty much covers it.

  • Hmmm... says:

    This is an example of greed at its finest, plain and simple. There’s no reason medical care of any nature should be as expensive as it is nor as limited as to who can and can’t receive it. Maybe doctors should actually start caring about their patients instead of their paychecks. There’s no reason a doctor can’t provide care for a person and receive the same pay and live the same lifestyle as the “average Joe.” There’s no reason for insurance companies to be worried about how much is coming out of their pockets instead of how much is coming out of patients’ pockets.

    Absolutely ridiculous. The only reason nationalized health care isn’t working for us right now is because too many people are too afraid of letting go of some green paper and actually helping those around them instead of themselves. Why can’t insurance offer better care for the same price? Why exactly does that hurt them so badly that they can’t even care enough to help out others? Because they’ll have to cut down to maybe just two cars for their family of four? One house they’ll have to live in year round instead of having their vacation home too? So many other families are doing it, yet because of those who can afford to give more not doing so and being selfish, it’s those families who have to scrape by and live paycheck to paycheck and have to go with the “affordable” plan that covers barely anything in terms of healthcare. That is disgusting. Every American deserves the best care regardless of how much is in their wallet. How anyone can disagree with that just proves how selfish Americans have become.

    It’s time America stops being so concerned with the individual and starts looking at the whole. There’s plenty that can be done to better this country for EVERYONE, but there’s hardly anyone willing to do the work. Instead, we point fingers and blame people who are actually trying to do something just because we don’t agree with it or because we haven’t given it enough time to even see what might happen.

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