Critical Condition

McDonald’s Case Highlights Obamacare’s Threat to Low-Income Workers, Political Freedom

Many employers, such as McDonald’s, provide health benefits that are less comprehensive than most. They may have an annual claims limit of $10,000 or less. But if you’re young, healthy, and need to pinch your pennies, that may suit you just fine.

These are the health plans (and the workers) that are seeing the highest premium increases under Obamacare. The Wall Street Journal reports:

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…

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…”Having to drop our current mini-med offering would represent a huge disruption to our 29,500 participants,” said McDonald’s memo…

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.

Aetna declined to comment; it has previously indicated that the requirement could hurt its limited benefit plans.

“There is not any issuer of limited benefit coverage that could meet the enhanced MLR standards,” said Neil Trautwein, a vice president at the National Retail Federation, using the abbreviation for medical loss ratio.

Yet again, we have evidence that President Obama’s oft-repeated pledge that “if you like your health care plan, you can keep your health care plan” should have come with a disclaimer: Offer not valid for low-income workers.

Not to fear, says the Obama administration. According to Bloomberg:

The government may allow some low-cost plans like those offered at McDonald’s, which have limited benefits, to get waivers from the health law’s insurance requirements, according to a Sept. 3 Health and Human Services memo. Those requirements were waived for McDonald’s on Sept. 24, [HHS spokeswoman Jessica] Santillo said.

Sorry, but I don’t find it comforting that Obamacare gives HHS the power to waive these regulations on a case-by-case basis. Power corrupts. We’ve already seen HHS secretary Kathleen Sebelius use other powers granted her by Obamacare to threaten insurers who contradict the party line about the law’s cost. The waiver power gives her another club to use against insurers and employers who complain about the law or donate to the wrong political campaigns. (Will Home Depot, Disney, CVS, Staples, or Blockbuster dare to misbehave?)

Any such criticism now triggers an autonomic reflex among administration spokesmen where they regurgitate the lines, “Americans have seen what happens when insurance companies have free rein. The Affordable Care Act ends insurance companies’ worst abuses.”

As if giving bureaucrats free rein to engage in abusive government practices is an improvement.

Michael F. Cannon — Mr. Cannon is director of health-policy studies at the Cato Institute and co-author of Healthy Competition: What’s Holding Back Health Care and How to Free It.

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