McDonald's May Drop Health Plan Part 1

[Sarajmt]

    * McDonald's May Drop Health Plan: The chain has told regulators it may ditch its plan unless a new health-care requirement is waived, Janet Adamy reports.

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 patient

McDonald's says the new health law threatens coverage for many workers, like these in Times Square.

McDonald's move is the latest indication of possible unintended consequences from the health overhaul. Dozens of companies have taken charges against earnings—totaling more than $1 billion—over a tax change in prescription-drug benefits for retirees.

More recently, insurers have proposed a round of double-digit premium increases and said new coverage mandates in the law are partly to blame. HHS has criticized the proposed increases as unwarranted.

Democrats, looking toward midterm elections in which the health overhaul is an issue, say it already has stopped insurance practices they call abusive, has given rebates to seniors with high out-of-pocket prescription costs and has allowed parents to keep children on their insurance plans until they turn 26.

McDonald's, in a memo to federal officials, said "it would be economically prohibitive for our carrier to continue offering" the mini-med plan unless it got an exemption from the requirement to spend 80% to 85% of premiums on benefits. Officials said McDonald's would probably have to hit the 85% figure, which applies to larger group plans. Its insurer, BCS Insurance Group of Oak Brook Terrace, Ill., declined to comment.

McDonald's didn't disclose what the plan's current medical loss ratio was.

The issue of limited-benefit plans has also hit colleges, which face the same 80-to-85% requirement beginning next year.

"Having to drop our current mini-med offering would represent a huge disruption to our 29,500 participants," said McDonald's memo, which was reviewed by The Wall Street Journal. "It would deny our people this current benefit that positively impacts their lives and protects their health—and would leave many without an affordable, comparably designed alternative until 2014."

The health law expands Medicaid and offers large subsidies to lower-income people to buy coverage, but those provisions don't kick in until 2014.

Federal officials say there's no guarantee they can grant mini-med carriers a waiver. They say the answer may not come by November, when many employers require employees to sign up for the coming year's benefits.

The government is waiting for the association of state insurance commissioners to draft recommendations. The head of the association's health-insurance committee, Kansas Insurance Commissioner Sandy Praeger, said she doesn't think these types of mini-med plans deserve an exemption.

"If they are sold as comprehensive coverage, we expect them to meet the same [medical-loss ratio] standards as other health plans," she said.
Without Coverage

Some options for low-wage workers if they don't get health insurance on the job

Under current system:

    * May be eligible for Medicaid, the federal-state program for the poor, especially families with children
    * Can purchase private insurance on individual market, but premiums are likely to be too costly n Hospital emergency rooms must treat all comers without regard to ability to pay.
    * Some 1,200 federally funded community health centers offer low-cost basic care.

http://online.wsj.com/article/SB10001424052748703431604575522413101063070.html

[teko]

NOT

Health secretary says McDonald's not dropping health plans
By Julian Pecquet - 09/30/10 12:38 PM ET
  
A Wall Street Journal report alleging McDonald's might stop covering 30,000 workers because of the health reform law is "flat out wrong," Health and Human Services Secretary Kathleen Sebelius said Thursday.

The story quoted a memo from McDonald's Corp. to federal officials saying it would be "economically prohibitive for our carrier" to continue offering a limited benefits plan to some 30,000 hourly workers if it has to comply with new requirements requiring plans to spend a minimum portion of premiums on care — known as the medical loss ratio.

Sebelius told reporters HHS was in no position to award a waiver on the medical loss ratio requirement because the regulation has yet to be adopted.

"We can't waive a regulation that doesn't even exist," she said.

She said the company asked for a waiver from the law's restrictions on annual limits two weeks ago and received it within 48 hours.


McDonald's says the allegation is "completely false."

Sebelius made the comments at a breakfast event sponsored by the Christian Science Monitor.

She also touted the benefits of the health reform law and said support would grow as Americans realized the personal benefits they stand to gain from the law. She said she has already visited more than 20 states to make that case.

But she quickly added that while jobs was the top issue on voters' minds, the real story of the 2010 elections is the gobs of money being spent opaquely in the wake of the Supreme Court's decision on campaign financing. In a veiled reference to the Tea Party, she encouraged journalists to find out who's funding the movements that are grabbing the headlines.

"The amount of money being spent is just staggering," she said. "The opaque nature of that money and [the] funding [of] grassroots operations by millionaires and billionaires ... is just pretty alarming."

During the wide-ranging conversation, Sebelius said implementation of the law six months after enactment is going "amazingly well." She also argued Republican efforts to defund the law would not hurt a make-believe "empire" under construction at HHS but rather programs such as the high-risk pools and a program that helps companies cover their early retirees.

"I think all of that could be jeopardized," she said.

Asked about any plans for her or Centers for Medicare and Medicaid Services Administrator Don Berwick to respond to Republicans' request that they testify, she said such requests should come from committee chairmen.

Sebelius also pushed back against allegations that she or the administration have any animus toward health insurance companies. To the contrary, she said, the new law will help the private market stay afloat because more and more businesses and individuals have been dropping coverage as prices skyrocket.

"This is a healthcare model built around the private market," she said. "It might be the salvation of the private market."

Sebelius also said pricing information would begin to go up on the HealthCare.gov website on Friday.

[brice1967]

Baucus actually said, "I dont think you want me wasting my time reading the enitre bill?"  Holy Moses!  No Max....no, dont read a damn thing.  Just go in and do whatever you want to do...but be for sure that you arent reading a thing.

This is broken government..... "we hire experts to read this stuff".  Who's paying these experts Max?  If you paid a guy enough money, I bet he'd say youre the greatest man on earth....

I understand its statutory language, but its your damn job to know what youre voting on.  Get another opinion, numb nuts.  

[Sarajmt]

And the Tea Partiers were called crazy because they kept saying "READ THE BILL".  How crazy is that now???

As for Max Baucus who introduced it in the Senate:

Senate Finance Committee Chairman Max Baucus (D-Mont.), one of the chief authors of the healthcare law, suggested Tuesday he did not read the entire piece of legislation.

Speaking at a forum in his home state, Baucus and Health and Human Services Secretary Kathleen Sebelius were asked by an audience member if they had read the whole bill and “if not, that is the most despicable, irresponsible thing.”

“I don’t think you want me to waste my time to read every page of the healthcare bill,” Baucus said, according to the Flathead Beacon. “You know why? It’s statutory language. ... We hire experts.”

Republicans, who opposed the law in lockstep, frequently criticized Democrats for the length of the bill and often pressed members if they had read the legislation or not. In March, Congress passed the legislation and President Obama signed the 961-page final bill into law.

At least one Democratic lawmaker, Sen. Claire McCaskill (Mo.) made a public showing of reading the bill.

Democrats dismissed the criticism, saying it did not have anything do to with the contents of the legislation.

Baucus's office said that his comments did not mean that he does not know what it is in the law.

"Senator Baucus wrote the bill that passed the Finance Committee and then worked with his colleagues to write the health care bill that is law today. He has spent years crafting this policy and hundreds of hours reading and perfecting it," spokeswoman Erin Shields said. "There is simply no question that he understands the provisions in the health care law and knows it is a historic improvement that will make our health care system more affordable and accessible for families in Montana and across America."

Baucus held frequent hearings and published multiple reports about the legislation during the process of its passage.

At the town-hall event, Baucus defended the sweeping law.

“It’s not perfect, nothing’s perfect, but I’m telling you, ma’am, it’s a good start,” Baucus said. “Mark my words, several years from now you’re going to look back and say, ‘Eh, maybe it isn’t so bad.’ ”

[Sarajmt]

For as long as the political fight took over the past year, the abbreviated review process on the health care legislation currently pending on President Obama’s desk is unquestionably going to result in some surprises — as happens with any piece of mashed-up legislation — both for the congressmen who voted for it and for the American people.

One such surprise is found on page 158 of the legislation, which appears to create a carveout for senior staff members in the leadership offices and on congressional committees, essentially exempting those senior Democrat staffers who wrote the bill from being forced to purchase health care plans in the same way as other Americans.
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A major story during the course of the health care debate was whether members of Congress would commit to placing themselves in the same health care exchanges as average citizens, or whether they would hang on to their government plans — that’s why leadership chose to add this portion to the bill, serving as a guarantee that members would participate in the same health plans as the people. Here’s the relevant text:

    (D) MEMBERS OF CONGRESS IN THE EXCHANGE-

    (i) REQUIREMENT- Notwithstanding any other provision of law, after the effective date of this subtitle, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are–

    (I) created under this Act (or an amendment made by this Act); or

    (II) offered through an Exchange established under this Act (or an amendment made by this Act).

But as with a lot of legislative matters, the devil is in the details — or in this case, the definitions. As anyone who’s worked on Capitol Hill knows, the personal office staff for a member is governed by different rules than those who work on committees and in the leadership offices. It appears from the way this language is written that those staffers NOT in personal offices, such as those working and paid under the committee structure (such as those working for Chairman Henry Waxman) or those working on leadership staff (such as those working for Speaker Nancy Pelosi) would be exempt from these requirements (emphasis added).

    (ii) DEFINITIONS- In this section:

    (I) MEMBER OF CONGRESS- The term `Member of Congress’ means any member of the House of Representatives or the Senate.

    (II) CONGRESSIONAL STAFF- The term `congressional staff’ means all full-time and part-time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC.

According to the Congressional Research Service, this definition of staff will only apply to those staffers employed within a member’s “personal office” — meaning that it will absolutely not apply to committee staff members, and may not apply to leadership staff.

This problem was acknowledged earlier in the process — last year, Senator Grassley tried to repair it, but he was rebuffed.

As Speaker Pelosi said a few weeks ago, it’s only after this legislation is passed that we’ll truly find out what’s in it.

Update: Grassley is renewing his push. Here’s a release from yesterday:

    “It’s pretty unbelievable that the President and his closest advisors remain untouched by the reforms they pushed for the rest of the country. In other words, President Obama’s health care reform won’t apply to President Obama,” Grassley said. “Last December, the effort to apply any new law to administration political leaders was rejected by the Senate Majority Leader. But there’s no justification for the double standard, and I’ll continue to work to establish fairness.”

    The Senate legislation passed last night by the House of Representatives includes an amendment Grassley sponsored and got adopted by the Finance Committee last fall to have members of Congress and their staffs get their health insurance through the same health insurance exchanges where health plans for the general public would be available. During the closed-door negotiations on the bill late last year, the Senate Majority Leader carved out Senate committee and leadership staff from this requirement.

    Subsequently, Grassley and Senator Tom Coburn attempted to offer another amendment to restore the requirement during Senate debate on the health care bill, but the Senate Majority Leader would not let their amendment to fix this loophole even come up for a vote. In addition to Senate committee and leadership staff, the amendment Grassley and Coburn filed during the Senate debate would have made the President, the Vice President, top White House staff and cabinet members all get their health insurance through the newly created exchanges. It would not have applied to federal employees in the civil service.

    Grassley said, “It’s only fair and logical that top administration officials, who fought so hard for passage of this overhaul of America’s health care system, experience it themselves. If it’s as good as promised, they’ll know it first-hand. If there are problems, they’ll be able to really understand them, as they should.”