Last night, in the latest evidence that the Murdoch-ization of the Wall Street Journal proceeds apace, the WSJ reported that McDonald’s was threatening to cancel its employee health insurance, calling it “the latest indication of possible unintended consequences from the health overhaul.”
Yawn. Put this one in the same bucket as the student health insurance scare a few weeks ago. As Aaron Carroll points out, there’s nothing either new or unintended about this. As Igor Volsky points out, both McDonald’s and the Obama administration said this morning that the story was overblown. “Wrong,” said HHS. “Completely false,” said McDonald’s. And as Jon Cohn points out, this whole manufactured story is about crappy health plans that provide almost no benefit in the first place:
The policies in question are so-called mini-med plans with very limited benefits. In the case of McDonald’s, according to the Journal, there are two options: Employees who go with the minimum plan pay $14 a week for a policy that won’t cover more than $2,000 in medical bills a year. Employees who opt for the “generous” option pay about $32 a week for a policy that maxes out at $10,000.
To call that “insurance” is to distort the definition, since these policies would do very little to help people with even moderately serious medical conditions. (You can blow through $10,000 in medical care with one emergency room visit.)….In the long run, McDonald’s employees need policies that protect them in case of serious medical problems. And they need policies they can afford. They’ll get those policies thanks to the Affordable Care Act — but not until 2014, because the administration and Congress couldn’t come up with enough money to implement the full scheme sooner.
To summarize: ACA requires health insurers to spend 80-85% of premium dollars on actual patient care. The mini-med folks claim they can’t possibly meet this target. (They’re probably blowing smoke, but leave that aside.) HHS knows all about this and is working on phase-in rules to accomodate problems. McDonald’s says they have no plans to drop coverage. And the entire thing is a short-term transition issue, since crappy mini-med policies will hopefully be replaced by actual useful coverage when ACA fully kicks in in 2014.
But other than that, it was a great story.