Thursday, September 30, 2010

For McDonalds’ Employees — and Others — an Unhappy Meal

The big story last night – beyond Congress’ pre-election adjournment – centered around the Wall Street Journal’s article indicating that McDonald’s may be dropping health coverage for its workers, given that the limited benefit plans it currently offers will likely be unable to meet the minimum medical loss ratio requirement to pay 85 percent of premiums back in medical claims (due in part to high turnover among employees, which raises administrative costs).  Reuters has a separate story on the Journal piece here.

It is of course ironic that this story came on a day when 59 Senate Democrats voted against legislation that would have permitted individuals to keep their current plan – as they were repeatedly promised by the President during the health reform debate.  But just as interesting is a paragraph suggesting that, when it comes to employers dropping coverage, McDonald’s may be the canary in the coal mine:

Insurers say dozens of other employers could find themselves in the same situation as McDonald’s.  Aetna Inc., one of the largest sellers of mini-med plans, provides the plans to Home Depot Inc., Disney Worldwide Services, CVS Caremark Corp., Staples Inc. and Blockbuster Inc., among others, according to an Aetna client list obtained by the Journal.  Aetna also covers AmeriCorps teaching-program sponsors, who are required by law to make health coverage available.

So not only could tens of thousands more private sector workers lose their health insurance coverage as a result of the new law and regulations, AmeriCorps’ government-paid volunteers could lose their current plan as well.

Some would argue – as the article itself references – that limited benefit plans “could be better.”  But while limited benefit plans may not necessarily constitute comprehensive coverage, it’s also clear that some coverage is better than no coverage at all – and yet the medical loss ratio requirements may have the perverse effect of RAISING the number of uninsured between now and 2014.