Thursday, September 30, 2010

Obamacare forces cuts in low-wage workers' health insurance

By Donald Sensing

Thanks a bunch, Speaker Pelosi and Senator Reid.
McDonalds Corp. has announced that unless Congress provides relief from the terms of Obamacare, it will be forced to drop its health-insurance coverage of almost 30,000 low-wage restaurant workers. reports the Wall Street Journal.
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.
Well, there was sure one thing Speaker of House Nancy Pelosi got right about Obamacare before it was passed.

We're finding out quite a lot about what is in it. And none of it good. The Boston Herald reported this week, Massachusetts' largest health-care insurer, Harvard Pilgrim,
... was forced (by Medicare’s administration) to notify its [Medicare] customers that their plans would be canceled as of the end of this year. The company will offer another supplemental plan offering fewer benefits at a higher premium.
Expect more of these kinds of moves as 2013 gets closer, the year Obamacare will be fully implemented. Which leads one to wonder whether the administration's plan all along was for Obamacare so to overburden insurers with additional risks and costs that they have to reduce coverage or raise premiums, or both, to the point that the government would just take over health insurance with a single-payer system, which has been the Democrats' dream for years.

Update: ABC News says that Mickey D, Inc., is denying the report.

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