Will McDonald's Drop Health Care?

McDonald’s is or was at least kicking around the idea of dropping health care for 30,000 workers, in what seems to be a nose-thumbing reaction to government health care reform.

The Wall Street Journal got ahold of a memo to federal officials that said it would be “economically prohibitive” for the company to continue offering its current health plan unless it got an exemption from a mandate to spend 80 to 85 percent of premiums on benefits.

A McDonald’s spokesman told the WSJ that it will look for “other insurance options” if the feds deny the waiver. “McDonald’s will continue to be committed to providing competitive pay and benefits,” the spokesman said, meaning the memo could just be posturing by the company.

If not, maybe McDonald’s thinks its employees are independently wealthy and immune to sicknesses of all kinds.

McDonald’s May Drop Health Plan [The Wall Street Journal via The Awl]

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  1. PunditGuy says:

    A company built on operational efficiency can’t deliver health care to its employees unless it has more than a 20% markup? Shenanigans.

    • Preyfar says:

      So, basically McDonalds seems to be admitting it’s profiting off of its employees under the guise of health care, and… oi. I know there’s overhead to pay for to run these programs, but… really?

    • Loias supports harsher punishments against corporations says:

      Not exactly a markup. The 15-20% would be comprised of upkeep and logistics (i.e. managing the plan) and then profits. But no company-run plan should be making profits, it should be run at cost or at a loss. (unless this doesn’t include the profits made by the plan’s carrier). And no insurance plan should have more than 10% logistics cost. Upkeep on a plan should be kept under 5%; if not it’s a very inefficicent plan.

      • nova3930 says:

        Which can be done if you have a very stable workforce. Problem is, that’s the exact opposite of what McDs has. There’s a lot of man hours (ie expense) that go into processing the paperwork to put someone into a health plan who may just quit next week for whatever reason.

        • ARP says:

          Well the average is for a company is about 10%. So they have 2x the average to account for turnover. So PunditGuy’s shenangians tag still holds.

          • Limewater says:

            Most plans cost a lot more than $700. I could be wrong, but I’m guessing that it doesn’t cost a whole lot more in terms of overhead to administer a plan with $2000 premiums than it does one with $700. Sure, overhead is usually closer to 10%-15%, but that’s %10-%15 of a few thousand dollars, not $700.

        • goodcow says:

          Maybe McDonalds should address high turnover by looking into keeping workers interested in staying with the company through better pay and benefits. You know, just a thought, instead of this race to the bottom mentality.

          • FrugalFreak says:

            +1 Applause for the logical comment.

          • MauriceCallidice says:

            Maybe the government should just let McDonald’s and their employees decided whether or not they wish to have this arrangement for health care, rather than saying it’s not allowed as implemented.

            • RvLeshrac says:

              Actually, it IS allowed. Most employers don’t cover employees the moment they’re hired, nor do they have to. They have “open enrollment periods,” usually twice a year, when all plan changes are processed. You aren’t eligible for your employer’s health insurance plan until the first “open enrollment” rolls around.

              The law takes this into consideration.

      • Leksi Wit says:

        Exactly!

    • Sepp_TB says:

      What the consumerist post above doesn’t point out, but the article does, is that its a very different kind of health coverage than most health plans, called a mini-med, where employees pay a portion of each pay check for either $2000 or $10000 in annual coverage.
      McDonald’s is pointing to frequent turnover as the source if increased admin expenses. But even so, 20% admin seems like enough, the health insurance industry does plenty better than that, averaging about 12% (at least in NY). We saw the federal loss ratio mandate and shrugged, our state has been at that level for a long time.

    • davidc says:

      You obviously have no idea what it takes to manage payroll, let alone health insurance issues.

      The 80/85% rule was put in there for the *normal* plans that run $300-$600 per month. 15% of $600 is $90 ($45 for 300). 15% of $70 is $10. Law of logic goes like this: If $45 to $90 is reasonable cost to admin a health insurance, then only allowing $10 is insane.

      Reverse that, if $10 is reasonable to admin a health insurance plan, then $45 to $90 is insane. You have to choose … you can’t say one is reasonable and the other is not because the *work* involved is the same, regardless of the ticket price.

      I tend to side with McD’s on this one just based upon the “Law of Logic”. The rule was not *designed* for low price health insurance options, it was designed for the standard ones. If they Government was smart, which they are not, they would have put in a sliding scale with, at minimum, a floor on the 80/85% thing … like $50 per or something.

      • PunditGuy says:

        Just out of curiosity, since you’ve cast doubts on my knowledge of health insurance issues, do you know precisely how medical and minimed plans are administered? Do you think they’re the same?

  2. Loias supports harsher punishments against corporations says:

    Other companies seem to do it just fine. Stop whining.

    • omg says:

      The minimum wage world has high employee turnover, which means McDonald’s and other minimum wage employers can’t do it as “just fine” or as cheaply as do employers with middle class compensation packages.

      • Loias supports harsher punishments against corporations says:

        Which is why the new reform creates insurance pools for private citizens and self-employed workers. McDonald’s employees won’t have to rely on their crappy company insurance.

        From a plan specific perspective, this plan was terrible anyway. In most circumstances, they would be better off saving the money or putting it into an HSA instead.

        • colorisnteverything says:

          An HSA does nothing. The average person cannot save enough money for retirement. And now you want them to save for out of pocket costs. In the last 6 months I have racked up over $25,000 in medical bills before insurance. Even if I made 50 k a year, I would be out WAY more than I could handle after ONE incident.

          And as someone who worked for Medicaid and does health policy research for a living, these accounts are more than expensive. In my state, the pool for pre-existing conditions (where I would fall) is more than $800.00/month. That is not affordable for most people working at McDonald’s.

      • jessjj347 says:

        And do you not think that a lack of health coverage contributes to high turnover? Many large companies that do have health insurance will not give employees enough hours to qualify for coverage, and then encourage those employees to seek public benefits…

    • areaman says:

      I agree. Costco provides health insurance for their workers and Sam’s Club does not. They are both in the same type of retail.

      Starbucks does health insurance for their workers (even some part timers) and many many other coffee places don’t (maybe even Peet’s?).

      Like Loias is saying, It can be done.

  3. apd09 says:

    McDonalds business plan,

    Year One: drop health benefits and give free meals to all employees.
    Year Two: Hire new employees because all previous employees died
    Year Three: see year two.

    • Preyfar says:

      Year Four: Offer new employees early retirement with benefits, and free food. Bring to market McSoylent Green.

  4. savvy9999 says:

    Maybe they should bring back the Hamburglar. Very apropros considering the boardroom enjoys stealing profits at the expense of the well-being of its employees.

  5. ElizabethD says:

    Great. “McDonald’s makes nation sick; drops health insurance”

  6. JoeTheDragon says:

    They don’t have Health care they have joke care about $700 /year for a $2000 max pay out + co pays.

    This why we need reform and killing the bill will just let more people end up with shit health care plans.

    • TuxthePenguin says:

      Excuse me? You are offering them a plan that will let them pay for $2000 worth of care for $700? That’s a 65% discount! Remember, these are given to their low-skill, low-wage employees. They cannot afford the higher-priced plans because their premiums would eat their entire paycheck!

      • Loias supports harsher punishments against corporations says:

        That’s assuming you use your $2,000 every year. Most will likely use less than their premiums every year, and possibly every few years use near or at their cap.

        These mini plans aren’t health insurance. Health insurance is supposed to protect you from the catastrophic, and these do not.

        Frankly, the employees are better over keeping the money in a savings account. The only benefit they get from the plan is negotiated rates on medical procedures. Which is a load of shit anyway; why do I need an insurer to get negoated rates on medical procedures. Procedure costs should be uniform.

        • TuxthePenguin says:

          (I agree with you that they should just save their own money, but I’m playing devil’s advocate… I was earlier as well)

          This really is insurance. You can pay $700 a year to offset a $2000 future expense. If you think you could spend less than $700 a year in medical expenses, don’t get it. If you think you will spend more than $700 a year, get it. Its that simple. You’re getting a window of “free money” thanks to the insurance.

          • Loias supports harsher punishments against corporations says:

            Again, that’s only benefitial if you use that $2,000. Who has emergency care every year? Not many. Some yes, and for them this is a boon, for the majority it’s a scam.

            • TuxthePenguin says:

              No, actually it would be beneficial if you use more than $701. Granted, the greatest benefit is if you spend exactly $2000, but even at $701 you’ve only paid $700.

          • MaxH42 thinks RecordStoreToughGuy got a raw deal says:

            The whole point of INSURANCE is to hedge against things that are either highly uncertain and/or highly risky. If we all could know with that kind of certainty what our health expenses (risk) would be, there would be no such thing as health insurance. (What company would be in that business if the payout was that predictable?).

        • OnePumpChump says:

          Works okay in Japan.

    • Nigerian prince looking for business partner says:

      I was also shocked when I saw the plan. I imagine the vast majority would be better off with an HSA and a high deductible plan. A $2,000 maximum payout really doesn’t provide any financial protection in an emergency. Just having a regular savings account for that $700 premium and going uninsured might even make more sense.

      • Dover says:

        Exactly, these plans are more of a scam than anything. The best value is the one with the $10,000 annual limit, which might cover a hospital stay. McDonald’s should be embarrassed to offer these plans to their employees.

    • Hoss says:

      You’re completely right. Buying $2,000 worth of insurance for $728 is financially crazy for nearly everyone. Imagine fainting for no apparent reason, then getting to a doc to find out they can’t do an MRI

  7. TuxthePenguin says:

    Obama is a mind-reader. I’m sure none of those 30k people liked the healthcare plan they had, not in the bit. Obama wouldn’t lie to us, would he? He told me if I liked my plan, I could keep it… /sarc

    All that aside, you have to remember that his “health plan” is what many of the minimum wage workers were offered. You obviously can’t offer them the typical full blown health care (they wouldn’t make enough to cover their portion of the premiums) and they aren’t skilled enough to justify paying them enough to do so. Simple economics. Their skills are easily replaceable.

    • PunditGuy says:

      Yet another argument for universal health care. Healthy people who make your food = good thing.

      By the way, the excuse that The Arches has given doesn’t match your complaint. This isn’t about providing them with Cadillac care; it’s about making sure that of the $700 the employees pay in premium, not more than $140 of that money goes to the administration of their care. Sounds like someone at the company found a way to make some money back from their employees and they don’t want to give it up.

      • omg says:

        The middle class, sadly, has adopted the entitlement mentality they deride in others. They are accustomed to cheap Big Macs and all the other cheap consumer goods and services afforded them by low-wage labor.

        And believing themselves entitled to these goodies, they are unwilling to support higher wages and benefits for the workers who provide these goodies, if that means higher prices.

        McDonald’s employees are ahead of millions of low-wage workers who don’t even have the option of obtaining affordable health insurance.

        • ARP says:

          Partially disagree. It’s upper class entitlement that causes middle class frustration through depressed wages.

          CEO have been taking a larger and larger share of salary costs, leaving the middle with less and less. Until 1980 executive pay to line worker pay was about 45x. It’s now in the 400x range. So are CEO’s doing 10x the work. This was partially caused by lowering tax rates. From 1930ish to 1980 our highest tax rates have been up to 90% (and even capped for short periods), but usually hovering around 70% (which means we’ve been socialists for about 50 years according to Faux News) creating a de facto salary cap. Once that “cap” was removed, greed took over.

          http://www.forbes.com/2008/04/30/ceo-pay-historic-lead-bestbosses08-cx_sd_0430flash.html
          http://faculty.chicagobooth.edu/workshops/AppliedEcon/archive/pdf/FrydmanSecondPaper.pdf
          http://www.thestreet.com/story/10801121/10-ceos-who-earned-a-years-salary-in-an-hour.html

          Middle class wages have become stagnant for many years. So, even small increases in prices have big impacts on a persons’ budget. It doesn’t create entitlement, but frustration and anger that they’re feeling nickel and dimed by everything. People react by creating boogie men that have a minimal impact on their wages- tax rates are at its lowest point since 1929. They also use credit cards and borrowing to “feel rich” in an unsustainable debt cycle since they work more hours for less pay.

          So increasing prices won’t go to the employees, it will go to CEO pay and shareholders- a majority which are institutional investors, who also have high salaries, which is managed by benefits companies like Hewitt, etc., who also have high salaries, so that your 401(k) is actually quite diluted, even if you own stock.

          / slightly off topic rant

    • BrazDane says:

      So you are completely OK with the fact that even though they work their 40 hr. weeks just like anyone else, their health is not worth protecting because “their skills are easily replaceable”?

      • TuxthePenguin says:

        Are you willing to open your wallet and pay for their insurance right now? You and you alone?

        Do you think we should give the least-skilled amongst us $250k/yr drugs for 40+ years?

        Throw out the emotions and the “INEQUALITY!” rants and look at it from a purely economical point of view. That kind of expense versus income doesn’t work out in the long run. You can say “tax the rich more!” but eventually you run out of other people’s money.

        • Loias supports harsher punishments against corporations says:

          It’s a fair argument but a misguided one. If everyone paid into the insurance system, the cost would not skyrocket, it would go down. So yes, I would be more than happy to pay into a system that EVERYONE pays into and EVERYONE receives the same benefits.

          • George4478 says:

            Such a plan exists nowhere in the world. Obamacare is not planned to be such a thing either.

            • psm321 says:

              I know Obama’s bill isn’t, but how would you claim that single payer countries don’t have effectively this? (Everyone pays in, everyone gets the care they need)

              • JayPhat says:

                And single payer countries are going broke because it is 100% unsustainable. See Great Britain as an example.

                • Loias supports harsher punishments against corporations says:

                  Citation please.

                • psm321 says:

                  In the few places that actually does happen, it’s because conservatives gain power and cut taxes on their rich buddies, but they can’t cut the services because the people love them so much.

                  • JayPhat says:

                    So wiat, instead of everyone paying the single system to fund one another, we need to make the rich PAY MORE for the same service? I thought the single payer system meant that everyone paid the same amount in and got the same amount in return?

                    You can only milk the rich for so much before they say enough is enough. Moreover, what entitles us to the rich’s money? This is a serious question. Just because you make XXX a year means I get to take more and more and more of it because you’ve got it to spare? I think there’s a fundamental flaw in our country when we keep telling the “rich” we’re going to take more and more from you because we need to money when 47% of this country pays not ONE DIME into the tax system.

                    • ARP says:

                      You mean like how our country fell apart from 1930 to 1980 when the highest tax rates hovered around 70% but were as high as 90% (and even capped)? Take out the Great Depression (around 1938), and still you have 42 years of Socialism (according to Faux News).

                    • psm321 says:

                      fundamental difference of opinion. (yes, i do believe the rich who make all their money off the fruits of others’ labor in addition to their own owe more back to society… just like I who got a partially-subsidized education and make a “middle-class” wage owe more back to society than someone making minimum wage)

                • CreekDog says:

                  Great Britain’s single payer health care system delivers outcomes similar to ours yet costs about 1/3 of ours. If their system is bankrupting them, then ours is bankrupting us 3 times as badly.

            • JulesNoctambule says:

              Haven’t traveled much in the world, have you?

            • ARP says:

              Wait, Single Payer and UHC aren’t this exact model? All working people pay in and get health care in return?

            • Loias supports harsher punishments against corporations says:

              Trying to determine if you are being sarcastic.

              Dozens of this model exist in the world. True not “everyone” pay into it – nothing is 100%. But everyone pays unless they opt out, and in doing so find coverage on their own.

          • Rocket80 says:

            like social security? Oh wait, I don’t think you’ll be receiving any benefits from that :/ (if you’re under 30)

            • ARP says:

              Yes, you need to make adjustments to a any plan, just like insurance companies do.

              The problem we’re having with SS is that one party wants to dismantle the system, so their proposed fixes are intended to be severe, cold-hearted, etc. to create a false analogy (“well if you don’t want to raise the retirement age to 105, you need to privatize”). If you took the cap off the amount that can be taxed for SS, you’d be in the black for another 75 years.

              So the end result is nothing gets done and it falls into a state of disrepair. I’d rather be able to vote on those people than have major corporations make those decisions for me.

        • psm321 says:

          “Are you willing to open your wallet and pay for their insurance right now? You and you alone?”

          Not me alone, but yes I would be happy to pay higher taxes to contribute towards people not dying because they can’t afford healthcare.

          “Do you think we should give the least-skilled amongst us $250k/yr drugs for 40+ years?”

          Yes, I think we as a society should. It’s a fundamental difference of viewpoint I think between the 2 sides, not misunderstandings on one side or the other.

          That said, the healthcare bill was stupid because it just gives more power to the corrupt insurance companies who will deny you care anyway.

          • mac-phisto says:

            woah, woah, WOAH! it doesn’t just give more power to the corrupt insurance companies. it also gives more power to the corrupt healthcare providers, the corrupt pharmaceutical companies & the corrupt medical billers.

            • psm321 says:

              meh, I feel like the insurance companies are the worst of the lot. I mean at least doctors and even pharma companies provide actual value, regardless of whether or not they overcharge for it. ALL insurance companies do is suck money out of the system. Everyone needs care, this should be a society-wide insurance without for-profit companies sucking money out and providing nothing of value (and in fact finding excuses to deny care even when you have faithfully bought into the system…) Anti-governmenters can argue that a free market provides innovation that govt wouldn’t for treatments by doctors or drugs from pharam cos, but what sort of innovation do you expect or have seen from insurance companies, other than those that find ways to make even more profit while providing less healthcare?

              • mac-phisto says:

                i’m just saying that the other parties aren’t entirely altruistic here. yes, insurance companies make more profits by denying claims. that’s evil. but medical billers frequently submit fraudulent bills (just ask anyone who has worked in the industry – it happens. A LOT) & that increases the cost of care for everyone. pharmas have huge markups on their products & they spend increasingly more money on marketing than R&D every year (despite evidence that direct marketing of drugs results in worse care for patients). should your $2,000/day cancer meds really go toward marketing the next viagra? & care providers? don’t even get me started. i respect the people that devote their lives to caring for others, but hospital administrators are just as bad as insurers. never mind that we’re kicking people out on the street 3 hours after major surgery – it’s all about the churn, baby! & don’t forget to order “the usual” string of testing so we can boost our numbers. maybe insurers wouldn’t be denying so many claims if everyone who went to the hospital with a fracture wasn’t put thru $20k worth of unnecessary testing.

                sorry – this is kind of a touchy subject for me. i have quite a few family members in various aspects of the industry which makes for some interesting holiday dinners. =P

        • BrazDane says:

          Absolutely, because it would also benefit me! I would know that if I or someone in my family got sick, they could also get this care and not be denied by a profit-motivated insurance company.
          Besides, doing exactly this works fine in most other first-world countries, whether it is outright nationalized or just heavily regulated private insurance companies!
          but as someone else said in response, it is a fundamental difference in viewpoint between you and I – I simply do value my fellow human beings that much, that I am willing to pay. And I know they are not working those low-end jobs because they like them, they have just not been as fortunate as I have.

        • MrEvil says:

          We as a society have already deemed it unacceptable to have paupers’ bodies stacked like cord wood outside the ER because they couldn’t pay for treatment. Hence why we now have laws that an emergency room MUST TREAT regardless of the patient’s ability to pay.

          It is the social responsibility of the haves to watch after the well being of the have nots. History has proven this fact time and time again. Revolutions have started because the Haves got fat while the have nots starved to death. And one other thing to remember, the Have nots will ALWAYS outnumber the haves.

          • ARP says:

            Unless you’ve sucessfully convinced that the reason that the have-nots are have-nots is because of high taxes (but we’re near historical lows) and that they need to give rich people more tax cuts and they just need to work harder. I think things will get much worse before they get better- a mix of corporatism (Tyrell, Weyland-Yutani, etc.) with a smattering of overzealous nationalism.

        • BettyCrocker says:

          Do you think that access to health care should only be for the rich? Or do you think, as I do, that everyone deserves access to it.

          It’s been my experience that people who have always had health insurance and access to see a doctor have no idea what it’s like for those who don’t. You question everything your children do. Can I got to my friends house and jump on a trampoline or climb a tree? No – because if you get injured, we can’t afford a doctor – but will have to pay out of pocket – and then we won’t be able to afford a place to live. Just one example that doesn’t even include getting sick regularly – let alone a catastrophe.

          Health care is not only for the rich. EVERYONE should have access.

          • zifnab0 says:

            Some people think that you should pay for services that you want, need, or desire. They may also think that people who provide these services should be compensated for their efforts.

            I (like many) don’t think access to healthcare should be restricted, but I also don’t like the idea of having to pay inflated sums to compensate for freeloaders.

        • kujospam says:

          You can’t run out of other people’s money moron. Money is created and destroyed in thin air true, but it’s the government that does it. True that brings other problems such as deflation and inflation. I personally believe that if you do a 40hour a week job and you can’t have a roof over your head, food on the table, and basic healthcare, then the job shouldn’t exist. So if McD’s goes out of business, boohoo on them. If all fast food went out of buisness, oh boohoo more then. Maybe people would cook at home more. Or maybe you would actually pay for the “fast” in fast food. Want a big mac? that would be 8 dollars please. I don’t believe in governing other people’s lives using government, but I do believe in shopping with my dollars. So I Hardly ever buy from McDs. Although the reason isn’t about healthcare, mostly crappy food and service around where I live.

    • jeff_the_snake says:

      or they could do the sane thing and make do with a little less profit. i’d even meet them halfway and pay 1.25 for my mcdoubles. their employees are doing honest work for little money and those jobs are much harder than you would think.

      • ARP says:

        No such thing. Any extra money you pay goes to executive salary and shareholders, not workers. In the spirit of the our current 80′s retro trend: Greed is good.

      • FrugalFreak says:

        I would too, I’d pay more to business somewhat if they returned to jobs like they used to be. A job used to mean job security, benefits, loyalty. the lack of it is businesses fault because of greed over profit margins.

    • FrugalFreak says:

      Don’t blame him, it is business/GOP that are throwing tempr tantrums because they don’t want to pay over slave wages. Remember the uproar over raising the minimum wage? They will fight anything decent or not if it makes them surrender being supreme overlords.

  8. SgtBeavis says:

    Here’s a thought way out of left field.

    Perhaps, just maybe, the new health care bill was simply a bad idea.

    Don’t get me wrong, we definitely needed Health Care reform, but did we really get it here? It seems that this monstrosity of a law is screwing more folks than it is helping.

    I haven’t seen my health care elections for the coming year but it seems that everyone that has is seeing very large increases in their premiums. It makes one wonder how this is supposed to be a good thing..

    • TuxthePenguin says:

      I’m with you 100% on this. Honestly, I’m very opposed to the idea of a single-payor, national/universal health care plan. But, to be even more honest, I’d rather some single, unified idea of health care reform than what came out of this sausage-making fest.

      For me, I don’t see why we couldn’t combine the the Republican and Democrat plans together. Remove restrictions about selling insurance across state lines, decouple health insurance from employment… blah blah blah, Republican idea #3 here, #4 here… and then allow the government to set up a government-backed non-profit to compete against all the other insurance companies. Only make it behave exactly like every other insurance company (ie, it doesn’t get the entirety of the Treasury to back it up, it has to stand on its own).

      If the government can run an insurance plan better than the private sector, it’ll gain market-share. Awesome! I have no problem with that. But what we have now… its going to be so much worse.

      • ARP says:

        What about pre-existing conditions. You risk making the public option the dumping ground and doom it to fail.

        BTW- I like your idea, but need to flush it out a bit.

      • AgostoBehemoth says:

        The problem is that “health insurance” isn’t “insurance”. Think about it, do you have car insurance? Home owner’s? I do – I used my car insurance last year when someone rear-ended me. I used my home-owners about 10yrs ago after a big wind-storm caused damage to my house. I don’t expect my car insurance to pay to oil-changes or flat tires, and I don’t expect my home-owners to pay for a new hot-water heater – but for some reason we all expect our “health insurance” to pay for everything, all the time – from office visits all the way up to chemo.

        If insurance is paying for everything – all the time – then it’s not insurance.

        I had a conversation with my Dr. about this -he told me the real darkside of the ins. companies.. is that he is contractually bound to charge the same rate to people without insurance (even though the insurance companies pay him about $0.50 on the dollar), he can’t discount without jeapordizing entire practice…. funny how that wasn’t addressed by the gov’t – their solution is all smoke & mirros – but they got some good spin on it.

        • Nigerian prince looking for business partner says:

          Not everyone has a PPO.

          I have a HSA/HDHP plan. It doesn’t cover day-to-day doctor’s appointments, vaccinations, stitches, etc. It pays out exactly $0 until my family spends our deductible ($5,000 in out-of-pocket). After that, it pays 100%.

          It’s really not much different than our auto or HO policies.

          • JayPhat says:

            I actually like these types of plans. I had one when I started out in college and had one until I was around 26 or 27 and got married, started thinking about kids, etc. Works great since I was never sick, but I had something to fall back on in case catastrophe struck.

        • ARP says:

          They started out with single payer and it went downhill from there. They gave away expanded medicare, public option, etc. They compromised over and over in some stupid hope that they’d get Republican support. So they got a few good things in it, but with a lot of loopholes.

          Who’s to blame? Both parties really. Republicans for offering amendment to a bill they were never going to vote for and democrats for being such wimps in the first place and actually thinking that compromising would win them votes. That Republican party died with Reagan.

        • GuidedByLemons says:

          Health care is nothing like collision or roof repair, and there’s no reason a health plan should act the same as auto or home insurance just because you have a stick up your ass about the dictionary definition of the word “insurance”.

          • Jezz1226 says:

            Why though? I’m honestly having a hard time seeing why it would be bad if health insurance acted more like home or auto insurance. I know that’s not the general state of affairs right now, that its more of a health plan situation for most, but why would it be bad if health insurance acted more like traditional insurance?

      • GuidedByLemons says:

        “Remove restrictions about selling insurance across state lines”

        If insurance can be sold across state lines, states will compete to have the most lax regulations about what constitutes “health insurance”, and insurance companies will headquarter themselves wherever they can get away with offering the crappiest coverage. See also: credit card companies and South Dakota.

        It’s a terrible idea put forward solely because it would be profitable for insurance companies.

        • TuxthePenguin says:

          I always hear this excuse why we shouldn’t allow sales across state lines. Assuming you’re right, why should that stop you? You’d eventually see a spread of “health insurance” like we have auto insurance. Trust me, the General, Fred Loyola Insurance and SafeAuto aren’t trying to compete with State Farm, Traveler’s, Farmer’s…

          Why would the choice between a barebones plan and a Cadillac plan be a bad thing? And did you miss the fact that I said the government would sponsor its own company? Perhaps it could offer both… and compete with the rest of the market.

          • GuidedByLemons says:

            “Assuming you’re right, why should that stop you?”

            Because the deregulatory race to the bottom created by jurisdiction shopping is actively harmful to consumers. The fake reason lawmakers provide for the idea of selling insurance across state lines is that it will allow more competition between insurers in different states, but in reality some state razes their insurance regulations to the ground and all the major insurers move there so they can rake it in selling crappy insurance.

            If we can’t have single-payer health care for some stupid reason, there should be a government-run health plan, but look how far that got in the Senate….

            When we talk about competitiveness in the insurance market, it’s crucial to realize that in the absence of regulation the most competitive thing to do is sell low-coverage, high-deductible insurance to young, healthy people, and find any excuse to cancel their policies if they get sick. The point of health care reform is that the free market is not equipped to affordably cover the old and the chronically ill. People who advocate purely market-based solutions for health care need to own up to the fact they’re advocating that people who can’t be profitably covered and can’t afford the medical care they need should be allowed to die. For anyone who’s willing to admit that, I have to say I disagree vehemently, but I at least respect your honesty.

    • Loias supports harsher punishments against corporations says:

      It WOULD have been a great plan had Republicans not been the party of no. It got watered down so much than many rruly effective elements became meaningless.

      • GuyGuidoEyesSteveDaveâ„¢ says:

        Come on, admit that it wasn’t JUST the Republicans. Admit the Dems played a hand in it to. This was a combined screw up.

        • PunditGuy says:

          This. They caved in before the negotiations even started, and then compromised further in exchange for lies (death panels) and no votes.

        • mac-phisto says:

          i blame the dems even more than the repubs. they had the votes to completely bypass the repub lockstep & a few select individuals used that for personal gain. we were so close to having the half-century dream of universal healthcare enacted & it was derailed by a few greedy bastards.

          hey DNC, if you’re listening – this is why i’m not a democrat. your “big tent” is making your party completely ineffectual. you’ve been quite the disappointment lately.

        • Loias supports harsher punishments against corporations says:

          I agree with you on that one too. Both parties failed. Republicans played hard ball and the Dems didn’t fight back much.

      • TuxthePenguin says:

        How many times did Democrats vote to accept Republican amendments to the bill? If you’re being given 0 input into something, of course your going to vote no for it.

        If Obama had half the bipartisan negotiating skills as the Evil Bush, the bill would have been much better. But Obama/Reid/Pelosi fell in love with their nearly unstoppable majorities and decided to try to go it alone. Take a look at the legislative accomplishments (and the voting record) of Bush’s major victories (Medicare Prescription plan for one… horrible idea, but it was bipartisan) and compare them to Obama. Why couldn’t Obama/Reid/Pelosi peel even a FEW Republicans away?

        • PunditGuy says:

          How many? Hundreds. http://www.whitehouse.gov/health-care-meeting/republican-ideas

          Don’t like the source (even though there’s footnotes)? Fine. http://mediamatters.org/research/201002100034

          Still no good? Fine. http://www.salon.com/news/opinion/feature/2010/02/23/hcr_amendments

          Hell, the premise of the bill starts to the right of proposals made by Republicans themselves back in the 80s and 90s. Dole had proposed reforms that progressives would have jumped at.

          If what you believed were true, then I’d be right there with you. But you’re wrong. That’s been the problem this whole election cycle — when the other side believes things that flat out aren’t true, it’s difficult to find common ground.

          • jshier says:

            Many of those ideas are were in the bill at some point and some were even in the bill that passed. And yet almost no republicans supported the bill. Why? Because they wanted it to fail, simple as that. There was no attempt at actual negotiation from the republicans, aside from 1 or 2 moderates. The rest just said no.

          • Maximus Pectoralis says:

            White House site, Salon.com and a site that says “help us fight conservative misinformation”? Way to post unbiased sources…

            • PunditGuy says:

              As opposed to no sources. That’s certainly much better.

              Sorry your precious Fox doesn’t cover news that doesn’t fit its agenda.

          • JayPhat says:

            Media Matters? Seriously? You might as well have posted a link to the New Black Panters or the KKK.

            • ARP says:

              You may not trust Media Matters, but review the video’s and cites, which are hosted by MM, but the content is from Fox News, House and Sentate, and other outside sources.

        • Loias supports harsher punishments against corporations says:

          What input were they providing? Or going to provide? They made it very clear on several occasion they’re goal was to make the reform fail. They wanted to see Obama and the Dems fail, and didn’t seem to care much who it hurt.

          Keep Fear Alive, 2010.

      • JayPhat says:

        Really? Last time I checked, Republicans were the super-minority in Congress, representing less than the thresshold to pass legislation. So it seems that a few Democrats were the party of no.

        • Loias supports harsher punishments against corporations says:

          Doesn’t super minority have to be 40 or less? The Senate was not in a filibuster-proof majority at the time the bill was passed.

          • wookieecookie says:

            The Democrats had a super majority up until December 2009, where they lost Ted Kennedy’s seat to a Republican.

            They had a year to pass Health Care Legislation unopposed by any Republican. They failed, but instead of taking responsiblity, they came up with this whole “Party Of No”, line of BS, which doesn’t pass the test.

      • not-gonna-tell-ya says:

        Your post seems weird and full of misinformation. When you have a filibuster proof majority in BOTH houses as the Democrats did, there can be no reason to blame the party of “No” can there???

        The only watering down came from the pens of the Democrats in Congress due to the fact that all proposals from anyone with an R by their name were disallowed.

        • Loias supports harsher punishments against corporations says:

          Not filibuster proof majority.

          Which in my mind was a terrible excuse. But still, there is it.

    • ARP says:

      In a certain sense, you’re right. I think Congress (Obama doesn’t make laws) underestimated how evil and greedy some businesses would be. He assumed they’d do the right thing and just cover their people, rather than try to find loopholes. They assumed wrong.

      For example, in this case, how hard is it to find a plan that’s higher efficiency, coming from a company that was a major efficiency innovator? If there were only another option that business and individuals could use that meet these requirements.

      But its this sort of example that creates the polarization issue within our government and economy. We can’t trust business to do the right thing anymore, so we have to legislate every little detail, which then leads to claims that we’re overlegislating. So we’re stuck with either failing laissez faire policies (see banks, food safety, oil spills, etc.) or government stepping and doing the work itself and a gaggle of astroturf funded, angry, conspiratorial, hypocritical retired white people protesting about it.

      • Maximus Pectoralis says:

        This is actually quite similar to the gun control laws that the welfare queen, drug-dealer Section-8 brainwashed gangster thug socialists have been trying to push on us for decades. It only works of people cooperate.

      • Datruth says:

        Go away, racist.

    • PunditGuy says:

      Posts like these completely blow my mind. Prior to this health care reform bill, in what direction were your premiums headed? In what direction was your care headed? I’m paying double what I was paying 4-5 years ago, for less coverage. That’s before any health care reform has kicked in.

      Did you expect that insurance companies would instantly, magically start offering reasonable prices and services? I’m guessing that’s just never going to happen, and why many of us mourned when single payer was removed from consideration, followed quickly by the public option.

  9. FatLynn says:

    In fairness, not offering it’s current health plan doesn’t mean no health plan. Wait, that’s a lot of negatives. I’m trying to say that they may offer worse health care, but not eliminate it entirely.

  10. ianmac47 says:

    If ever there was a reason for a national healthcare system, this would be it.

    • TuxthePenguin says:

      So because some of the least skilled workers in America cannot afford the full-blown medical insurance plans, we need to reorient the entire system and have the “rich” (read: rich who cannot avoid the higher taxes plus the middle class) pay for the medical care of the “poor”?

      Now I’m not advocating that the “poor” have no access to medical care. But, I hate to break it to you, even if we did have a single payor, universal health care system, the “rich” (in this case, those would are willing to pay extra) are going to have better access and results. This will always be the case unless you equalize wealth… good luck getting that concept through in America. Didn’t work in the Soviet Union, China has all but given up and Cuba is finally waking up…

      • jshier says:

        Universal healthcare isn’t necessarily equal health care. The rich will always have access to experimental treatments and programs that normal people never will. Universal health care is about ensuring that everyone, regardless of income, location, or skill, has access to a certain minimum amount. Making sure no one goes bankrupt trying to stay alive and making sure the rest of us don’t have to pay for expensive emergency care for anyone without insurance.

        • TuxthePenguin says:

          Two simple points that every debating health care need to answer:

          1. If you are not willing to go personally bankrupt to save your own life (lose your house, retirement, etc), why should you ask someone else to do it for you? A few days ago there was a story about how a couple was being foreclosed on because their son had a rare genetic disorder and they were basically bankrupting themselves to give him more time (or themselves more time with him).

          2. What is “minimum care”? No one has ever dared define that. Should someone on the universal care plan be given $250k/year drugs to maintain their life (another story earlier about a cancer patient and an earnings goof that screwed him out of his plan)?

          • Marc Levy says:

            Amazingly, these questions have been answered in nearly every other first-world nation.

            I may be exaggerating a bit — I am not a health care expert — but the national health care in Canada and many European nations seem to work, on the whole, pretty well. (There are always extreme cases of failure and success. I’m talking about on average.)

            • nova3930 says:

              Yeah, and they do it by RATIONING, either through outright fiat or through waiting lists, in order to control costs. I’m NOT willing to hand the decision about what care I get over to some gov’t bureaucrat who can’t be fired and doesn’t give a shit

              • PunditGuy says:

                Wake up. Your health insurance company rations — and unlike the government, has an incentive to deny you care. You have no control over the mid-level manager who makes the life-and-death decision that affects you and your family. You’re railing against the status quo, and don’t even know it.

              • suez says:

                Don’t know what kind of plan YOU have, but I have one of those so-called “cadillac” plans through work, and yet I had TWO major claims rejected due to loopholes, which forced me into over $20k in debt…and yet I’m still expected to pay my premiums…for what? Tell me again how my healthcare isn’t already rationed by accountants?

              • VeganPixels says:

                Yet you can’t get in line fast enough to hand the decision over to some bean-counter on a for-profit company’s payroll whose only reason for existence is to maximize the take for shareholders.

              • ARP says:

                Not true: Nothing stops a person from paying out of pocket to get faster/better care. In fact, England has a thriving private system as well.

                I think many of us would like some basic level of coverage for ALL people. Those who have the means are free to buy more/better/faster.

          • BrazDane says:

            First of all, assuming that a national health care plan would force other people to go bankrupt just so someone could have decent health care is crazy!
            Second, with both insurance and drugs there are huge profit margins built in which are being skimmed not just by those who need to fund the bill for drug R&D but mostly by shareholders who see these kinds of companies as investments that bring a profit. The only way an insurance company can run a profit is by taking money that could have been used to buy treatment, and giving it to already very wealthy investors.
            SO, if you eliminate the profit part of insurance companies, but still keep the employees and pay them a decent wage, you will free up A LOT of money for treatment. That alone, would easily make a national non-profit health insurance viable.
            Think of other countries with nationalized health care. Drug companies still do business there and private health insurance does exist, for those who want to buy even better, in most cases just faster, service.

      • Nigerian prince looking for business partner says:

        You’re assuming that we already don’t provide “free” care to the poor. For every person who shows up to the ER and doesn’t pay his bills, those fees get back to the rest of us through increased health care costs and ultimately higher premiums. In my state, a typically family plan costs an additional $2,000 to cover these costs.

        I would just like to add more transparency to the whole process. I pay roughly $10,000/year for my family’s health insurance and would much rather pay $8,000 and then a clearly defined additional $2,000 tax to cover the non-payers. Why not add some transparency to it all?

  11. oldwiz65 says:

    McDonald’s doesn’t give a rats tushie about their employees; when you are in the middle of a huge recession, you can always find many more people willing to work for minimum wages and no benefits. The very idea that McDonald’s would care about their employees!

    • TuxthePenguin says:

      That’s what happens when you’re working one of the least skilled jobs in the country. If one of their front-line workers quit today, how long do you think it would take for them to hire someone else? I’d imagine most of the time would be HR paperwork…

      • BrazDane says:

        So again, it’s their own fault for not being better educated? They are certainly willing to work their 40 hours a week. But you seem to think they simply rank lower as human beings, so they are not worth protecting and McDonalds is just doing the right thing??
        Funny how people who entertain the idea that one human’s life is worth less than another’s often invoke thoughts of German history in me…

        • TuxthePenguin says:

          No, when we’re discussing economic issues I stick to the economics. I try to keep emotion out of it unless there is a tight running between two opposing ideas.

          Step back and think about it – if you were the one designing the system, how much would you spend to keep someone making minimum wage alive? At what point would the costs of keeping them alive just become too much. $10k/year? Nah, their taxes would cover that. $250k per year? $1mm per year? There has to be a number up there… otherwise you’re just lying to yourself.

          • ARP says:

            But at a certain point economics and morality/emotion intersect. Many of us have decided that its worth making less to help others since we think its the right thing to do (and often indirectly benefits us in the long run) and we support government policies that further that goal. It’s the same reason you support flat taxes, etc., you view it at fundamentally “fair.”

          • VashTS says:

            I see the argument, but people want education also cannot afford it. Many rich entities, owned in the US were built on slavery and other unethical dealings. If the top one percent keeps getting the best of everything without compensating for past evil deeds, the poor will stay poor, keep the same crappy jobs and NEVER get a fair chance.

            You can say well some do, but for every one colored person there are about 25 whites who will get the opportunity. That is unfair, especially how many whites acquired wealth. Passed down from previous generations who enslaved others.

        • not-gonna-tell-ya says:

          The argument isn’t what you make it. All human life is special. 99% of this boils down to personal responsibility (again).
          If you want a better rate on your loans, you pay your bills and improve your credit rating. No one will do it for you.
          If you want a bigger house in a better neighborhood, you get a better job and go buy that house. No one will do it for you.
          If you want a better job, you sacrifice, spend the money to go to school and you get educated for a better(paying) job. No one will do it for you.
          If you want to take care of your family after you die, you spend the extra money now and buy better life insurance. No one will do it for you.

          Health Insurance is no different. If you don’t want to be financially destroyed when you break your leg or get sick, you pay a higher premium. No one will do it for you.

          removing the crazy 6% profit in insurance, would the rates be acceptable then? NO. That means that healthcare COSTS money. Where are those costs? What was in the bill to reduce the costs of healthcare? Nothing. Only theoretical things to reduce the cost of health insurance. There was nothing increasing competition to allow providers to sell across state lines. Nothing to reduce the tort costs. Nothing to reduce anything relating.

          The idea that if there is a problem (which I agree there is), the government should fix it for you is absurd. If you people think the insurance companies are greedy little people, then by all means start your own company that offers everyone insurance for 100 bucks a month and see how long you last.

  12. olderbudwizer says:

    A study out about 4 months ago showed that it’s far cheaper for them to pay the penalties than to fund the insurance. Several large employers are considering it – AT&T, GE, John Deere, and the likes. One example showed that would spend $600 million in fines, but $2.2 Billion to cover insurance for employees. I’m sure their board will have an easy time with that one. Thanks, Barack!

    • jshier says:

      Oh please. Nothing was preventing them from dropping health care altogether before and ACA has made it more expensive for them to do it now. They’ll offer health insurance for the same reason they did before: people expect it as part of the compensation for working there.

    • Loias supports harsher punishments against corporations says:

      A) Don’t blame one guy – you can argue he should take the majority of blame, but not all. You can blame both sides, because they both are to blame.

      B) Second, acompany that decides to pay a penalty instead of insuring their employees is a bad company. They clearl don’t see their employees as people. And that’s noone’s decision bu the company. Not Barack.

      C) Perhaps if a company can no longer insure their employees due to cost, then the private-insurance system has failed.

    • JustARandomThought says:

      So what?

      If you believe in the free market then you would have to believe the employees would see an equal increase in income, right? So that would help offset the future higher taxes, which are now going to be lower since the cost curve is being bent.

      Also employer provided insurance or government subsidized insurance via the tax code is not something a free market believer should want anyone. Conclusion, you just looking for an excuse to blame Obama.

  13. TheLastGiantRobot says:

    Is there a consumerist award for most pretentious article because this is in the running. Labor is a cost like any other in business and has to be controlled if a profit is to be made. The people who work at McDonalds do not have unique skills that would necessitate high levels of benefits and pay. These are entry level jobs that should serve as springboards for higher level employment or as high school jobs. Society should not help make McJobs viable careers as then we would just trap people in the lower class. Plus how long do you think it will be until they start automating McDonalds? How complex of an action is it to put fries in the frier? Protecting these jobs is like protecting the UAW before assembly robots were introduced to the lines.

    • jshier says:

      Actually, you’ve just won the award for the most pretentious response, since you failed to grasp the point of this article and instead responded with arrogant ramblings about the worthlessness of McDonald’s jobs.

    • BrazDane says:

      Or here’s a thought. How about we raise the price on burgers just a bit and let the increased earnings benefit the hardworking employees?
      See when you claim that making McD a viable place to work full-time, as a career, is a bad thing, you are completely disregarding the fact that IF you paid a bit more for your burgers, you would HELP make McD a viable place to work, HELPING those unfortunate enough to not be able to afford enough education to make the transition upwards.
      But of course, your argument sides completely with business and doesn’t contain the least regard for the humans working there – except for those in the boardrooms, of course. I wonder how fervently you’d entertain the same ideas/ideology if you had to work a minimum wage job at McD…

      • BomanTheBear says:

        Don’t pull that shit. Anyone who has ambition to move up, can. I worked 60 hours a week between being a cashier and being a pizza delivery man. In my off hours, I applied for every type of professional job I could come up with. I got noticed for my efforts and picked up. Sure, there will always be people who are limited to entry-level jobs forever due to disability or otherwise, and to them, I say there is honor in working. But I no longer have any pity for anyone with normal capabilities who complains about how entry level sucks without fighting to move past it.

        • Bativac says:

          Yeah. There are actually people (like myself) who started out in these shit jobs and moved on to actual professional careers, instead of expecting some company to compensate them highly and provide full healthcare in exchange for flipping burgers.

      • wookieecookie says:

        And when McDonald’s begins to lose money because of it’s loss of customers due to price hikes on it’s food and then it has to lay off said workers you seem to care so much about?

        As a consumer I have a lot of opportunities to turn to for low priced fast food hamburgers. I’m also on quite a budget myself, so why would I pay a premium for a lousy Big Mac, instead of a premium for… you know…. an actual Premium Hamburger at a restaraunt?

    • SideshowCrono says:

      Three cheers for you Sir. (And TuxThePenguin wherever you may have posted here).

      You can’t just legislate reality away. These are people with low skills and the market pays them based on that. We should push them to (but more importantly they should be pushing themselves) to make their skills more market friendly. We shouldn’t push to make McJobs careers.

      And for all the people complaining about how the issue is that the burgers are so cheap. It’s McDonalds. That’s the business plan. It’s for people who wan’t cheap food. If you would like more expensive food with better paid people making it, go somewhere nicer. I’m sure there’d be a lot of upset people (and hungrier) people if that McDouble jumped up in price 25%.

      I’m generally appalled and frightened by the lack of economic understanding on this site and in America in general. It makes me worry about our long term viability.

      • kujospam says:

        I generally agree with you. But don’t pretend that an education is going to do anything. There is no such thing as education making everyone getting better pay. Only education only having a few people paid more. You start off by talking about reality, well stick with it. Live in it. Use your brain I beg of you. Logic is a wonderful tool. If you want proof look at America’s history as the best example. So now instead of manufacturing for a descent paying job it is tech support and call centers and other office workers. The pay hasn’t really increased at all if taken into account for inflation. The only thing that has increased is the amount a ceo gets paid, but I’m not here to argue if they deserve it or not. that is for them and their customers to decide.

  14. Gadgetguy09 says:

    Looks like McDonalds is beginning their downward spiral. How many employees will they need to reemploy after this move? I bet this wont make their hamburgers any cheaper…..

  15. Wednesday says:

    As if there aren’t already a billion reasons to not eat at McDonalds. Now there’s the threat of a whole bunch of sick employees that have to come to work (because these types of places NEVER allow for employees to be sick and call in without a doctor’s note) and pass their illnesses on to the public because they don’t have the health care coverage to see a doctor, for either the note to get out of work or the cure to take care of the illness. Disgusting.

  16. EverCynicalTHX says:

    Thanks Obama!

    • Loias supports harsher punishments against corporations says:

      Obama signed it into law, but had no vote in it. Your blame lies with the 535 members of Congress.

  17. qbubbles says:

    I, for one, wouldnt mind an uptick in McD’s prices so that some $7.50/hr dish washer can afford to get her kid medical treatment for a cough.

  18. infected says:

    Another perfect indication of why the government has no business fucking with the private sector. They just need to stay out of it and let the free market work, which it always will.

    • Tim says:

      Worked so well with Wall Street!

    • jshier says:

      Health insurance market has never worked, why would it start now?

    • BrazDane says:

      It amazes me someone can be so convinced of something when there’s not a shred of objective evidence to suggest that when you let businesses do what they want, without oversight, they will automatically treat their workers decently. On the contrary, there is plenty of evidence to the opposite. And funny enough, it is NEVER the ones actually working at the company in question, who holds these views. It is always someone removed enough from the problem to never have to worry it would actually happen to themselves.
      Let me ask you this, if your company (assuming you work, and are not living off a trust fund) suddenly decided to drop your health care, which used to be part of your benefits, assuming they could do it legally, would you also support them in their right to do what they want, without regard for your or your family’s health and well-being?

    • captadam says:

      Depends how you define “work.”

      If you define a working market as making money flow upwards and screwing over the labor force, well, then, yeah. The free market works great when there is absolutely no public sector intervention.

    • DeepHurting says:

      The Free Market worked out great for everyone during the Industrial Revolution!
      I’m sure my new unregulated Insurance company will totally cover my phossy jaw!

    • FrugalFreak says:

      Will =Screw right?

    • CreekDog says:

      Every nation as developed as ours has a government run or government regulated health care system The free market has more control and power in ours than any of our peer nations.

      And what we get for that is a system that costs FAR MORE than any other nation.

      And the other we get is a system that COVERS FAR FEWER of our people than any other nation.

      Other than that, the free market has done wonders for our health care system.:sarcasm:

  19. fsnuffer says:

    What a crock blaming McDonald’s. They are not a social institution, they are a business. By mandating all these new provisions, the Obama administration has significantly increased the cost of providing medical benefits to employees by mandating free services and vastly increasing uncertainty by removing lifetime caps. I also hate to break it to you all but yes, McDonald’s wants to make a profit from its employees. If they cannot generate X amount of revenue greater than y amount of cost they will be out of business. Let’s look back a couple months ago when McD’s dropped their $1 meal due to increased costs. There was all the whining about what would the homeless eat. Face it, we were all lied to when congress and the administration said this would lower costs and we could keep our existing insurance plans. My company picks the plan, not me, and when the costs soar my company will change it for me.

    • PunditGuy says:

      Your complaint doesn’t match their excuse. If costs are increasing for care, that would make it easier for them to spend more of the premium dollars on care.

      They’re saying they don’t want to be held to a standard where at least 80% of the premium paid goes to care. That’s it.

      • smartmuffin says:

        They’re a business. They exist solely to return profits to shareholders. They need no “excuse” beyond “this makes us less profitable”

  20. mac-phisto says:

    i fear losing my benefits b/c of the mandate that allows parents to cover their children up to age 26. we’re a small office & spend LOADS of money on insurance benefits – adding another 2 or 3 individuals is going to increase our costs by about $20k & we’re already struggling to stay in the black.

    i’m all for providing benefits to people that don’t have them (for the record, i had my fingers crossed for universal coverage), but i have a lot of anger at some of these new rules. why should my company have to cover “children” that are gainfully employed elsewhere by an employer who doesn’t offer benefits? aren’t we just encouraging & subsidizing that practice? if 20-somethings aren’t encouraged to shop for employers based on their benefit package, aren’t we going to be in a race to the bottom? what happens when they turn 27 & still don’t have coverage – do we expect them to simply quit & find employment with a company that offers benefits?

    it all seems so backward.

    • jshier says:

      26 is the cutoff so that people can get through medical and law schools without having to worry (as much) about medical expenses when they already have huge amounts of student loans to worry about. How is that backwards? They can either get insurance or we can pay double when they have to go to the emergency room for treatment.

      Besides which, if you do work in a small office, their are all sorts of tax breaks you should qualify for in order to pay for any increased insurance costs. Plus all of the other tax cuts that have been passed by the Obama administration.

      • Nigerian prince looking for business partner says:

        Small group plans are going to be disproportionately impacted by the proposed changes. There’s really no getting around that.

        • mac-phisto says:

          the way to get around it would have been a provision that allows non-traditional groups to form. this would have allowed employers (or other organizations) to benefit from an economy of scale.

          to me, this just makes sense. if there are 20 mechanics in town that each employ 2 or 3 employees, they can’t afford insurance on their own. but together? they probably could. & the pool makes sense – it’s comprised of a group of individuals that could easily be priced into a pool.

          this is one of the directions the legislation should have taken, imo. you want to add more people to the rolls, don’t exempt small businesses from the mandate – find a way to make complying with it more affordable.

      • mac-phisto says:

        1) ok, great – cover kids while they’re in school. i’m all for that. but these kids HAVE JOBS. THEIR employers should be providing benefits – we shouldn’t have to compensate for employers that don’t provide benefits.

        2) we don’t pay taxes – not in a traditional sense (we’re a not-for-profit organization). we pay payroll taxes, but not income tax, so the tax breaks don’t help us. adding individuals will simply add cost to us without any tax benefit. this worries me b/c the only way i can see us compensating for it is thru reduced (or eliminated) coverage.

        i say it’s backwards because the loopholes in the law actually make it EASIER to NOT provide benefits to employees. small businesses don’t have to provide benefits, but now they benefit from potentially having employees covered by their parents’ policies. it gives them the best of both worlds. the goal of this legislation should have been to make the playing field MORE equitable, but i fear the opposite is what will actually happen.

    • GuidedByLemons says:

      Unless you’ve discovered a profitable business model built around deliberate, illegal age discrimination toward under-26 employees who specifically have parents with employer-provided health care, I really don’t think you have to worry about a race to the bottom.

      • mac-phisto says:

        well, i could easily kill health benefits altogether at my company, gear my recruiting toward young professionals & have my HR department give new hires a brochure on “possible places to obtain healthcare benefits” (including your parents, spouse or public assistance).

        that’s a viable strategy for streamlining costs – especially if the penalties for not providing benefits are less than providing them. once a few companies drop off that cliff, many more will follow to “remain competitive”. next thing you know, we’re all buying individual policies out of pocket (like we all fund our own retirement now instead of reaping the benefit of company-funded pensions).

        • GuidedByLemons says:

          “well, i could easily kill health benefits altogether at my company, gear my recruiting toward young professionals & have my HR department give new hires a brochure on “possible places to obtain healthcare benefits” (including your parents, spouse or public assistance).”

          Do you really think you’d attract good talent this way? And when your young employees turn 27, do you think they will stick around?

          When you talk about paying penalties instead of offering coverage, bear in mind that offering group coverage is likely cheaper than paying your employees enough to buy insurance out of pocket (even without considering penalties). They’re not going to accept the same wages they would if you were offering health coverage.

          • mac-phisto says:

            “they’re not going to accept the same wages they would if you were offering health coverage.”

            except they will already have coverage. that’s my point. they won’t consider the impact of paying for their own coverage b/c they’ll still be covered by their parent’s policies.

            when i graduated from college, i made sure the job i took had health benefits. scratch that – my mom made sure b/c every week when she’d call she’d remind me that i no longer was covered by her insurance. i’m pretty sure i got coverage just so i didn’t have to hear that particular lecture again.

            if i was still covered by her when i entered the job market, obtaining health insurance thru my employer would not have been such a big deal. i quit a job that didn’t offer benefits to take one that did – i probably wouldn’t have done that if my coverage thru my mother continued.

            & that’s why i think this will ultimately turn into a problem down the road. employers will seize the opportunity to hire already cheap post-graduate employees without providing benefits. employees won’t realize the loss of benefit b/c they’ll maintain benefits thru their parents. not only will employers realize the cost savings of not providing benefits, the competitive advantage will be magnified as other employers pay to cover their employees.

  21. JManBrody says:

    I will actively protest and refuse to buy their “food” if this happens. One of the most successful companies in the world that makes a shitload of money, can’t afford to pay for decent healthcare? As much as I hate the idea, perhaps the workers should start mentioning the formation of a fast food workers union.

  22. AEN says:

    Everyone’s missing the point on these “mini health plans”. McDonalds is not complaining that the cost is prohibitive to them. It’s complaining that the current rules allow the company to spend any money not used for medical payments for other non-medical uses – for example marketing. The law is saying that you have to use the premiums on paying for medical care. McDonalds wants to use the money not spent for medical care as a slush fund for regular business expenses – basically charging their employees for business expenses in the name of medical insurance.

  23. lifestar says:

    Wasn’t there a consumerist article last year that focused on how if ATT and Verizon were to cancel their health plans, the penalty fees they would have to pay to the US government would be less than 1/4 the cost of their health plans?

    When you make it difficult for companies to make a profit, then they will drop “essential” services.

  24. smartmuffin says:

    One of Obama’s socialist policies is completely failing? Surely what remaining vestiges of capitalism are allowed to exist in this country must be to blame!

    • ARP says:

      Socialism is an economic and political theory advocating public or common ownership and of the means of production.

      Show me the part of the law that says that the government owns the insurance companies.

      • smartmuffin says:

        I guess it depends on how you define “own”

        The government is telling them what customers they must accept and how their policies must work, what they must cover, and then regulating exactly how much of their profits must be paid back to the government in exchange for the right to do business.

        Maybe that doesn’t fit the dictionary definition of “ownership” but do you really OWN a business if you’re not allowed to select your customers, determine your own policies and regulations, and keep your profits?

  25. Guppy06 says:

    Does this just affect corporate or also franchises?

  26. Rocket80 says:

    The unintended consequences of government regulation rear’s it’s ugly head yet again. Amazing how frequently that happens……

    • ARP says:

      See: financial crises, child labor, oil spill, food safety, pollution, unsafe mediations, etc. Those were caused by too much government regulation.

  27. justleroy says:

    Mine and my family’s heath care is my responsibility, not my employer’s. If my employer were to drop health insurance as a benefit, that is their choice. Of course, it’s also my right to then go find an employer who does offer that benefit.

  28. shibblegritz says:

    Glad to see Consumerist expertise on health policy shining through brightly this morning. Not.

    Did you bother to *read* the article?

    “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.”

    It’s not thumb-nosing, it’s a reasonable approach to a problem created by this legislation.

    • BuyerOfGoods3 says:

      “because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims.”

      1. The government is not responsible for your crappy management resulting in High Turnover.

      • JayPhat says:

        It’s an entry level job, frequent with seasonal help from the younger generation needing a starting point in their work careers. That is what causes the turnover, not crappy management.

      • TuxthePenguin says:

        Have you ever worked at a McDonalds? Or a crappy, entry-level job like it? People don’t quit because they hate management or the company can’t manage – they quit because the summer is over, they don’t like the menial work. Heck, when I was a teenager, I remember one of the cashier girls quitting because she said the work was beneath her halfway through her first shift.

        And I also remember people just not showing up for… whatever reason. You’d be amazed the turn-over they face that is due to factors outside their control.

  29. Ohgodyoudevil says:

    Or not…http://abcnews.go.com/Politics/HealthCare/mcdonalds-fights-back-report-drop-health-care-plan/story?id=11764596

    But why would the Fox Street Journal want to lie about how health care reform is affecting minimum wage workers?

  30. BuyerOfGoods3 says:

    “it would be “economically prohibitive” for the company to continue offering its current health plan unless it got an exemption “

    Really? Really! I’d love to see the houses you Corporate Bosses and Shareholders are able to afford. Then you can talk about your minimum wage ($7.25hr or $58/day before taxes) workers COSTING YOU TOO MUCH IN HEALTH INSURANCE.

    Pricks.

    Go out of business already. Your food is death.

  31. SilentShout says:

    All of these insurance rate hikes credit card rate hikes, can’t get a mortgage etc. etc. are a transparent attempt from large corporations to tell the American consumer “If you dare to regulate us, we will bring the pain” It’s an open declaration of war on the American people and the best reason yet to break these bastards up. Can’t we please bring back monopoly busting?

  32. Chris W. says:

    Let’s not do any effort to present all the information here, no, let’s just posture.

    These are “mini-med” programs that are offered to low wage employees and part timers, to which the percentage mandate in the health care bill simply doesn’t work relative to actual realized benefits (these plans have less expenditures vs. standard plans, but the administrative costs etc. remain the same…making them autoamtically fall afoul of the 80-85% mandate.

    Crimony-if we’re going to posture why not: “Pass the bill to find out what’s in it”. Nacy Pelosi

    Well, we’re finding out what’s in it now that it’s out in the real world aren’t we?

  33. jeffile says:

    This is a prime example of government meddling (intentionally?) creating a problem then when people beg for a solution, conveniently come to the rescue. How soon will it be until most major companies see the benefit of paying a financial penalty rather than providing medical insurance? How long until insurance companies cease to exist because they can’t make a profit? Oh, that’s right. It’s for my good and, of course, for the children.

  34. and_another_thing says:

    Actually, it does take some skill to do a food-service job in a way that doesn’t threaten customers’ health. Just sitting through a health department class isn’t enough. Too many employees still touch their faces without immediately washing their hands.

  35. AEN says:

    McDonalds already admits that the medical benefit payouts on these plans is small – that’s why the overhead expense percentage looks bad. What they’re really complaining about is that they cannot spend the left over money in the medical accounts on business expenses – which is allowed under the current “mini med” rules but prohibited under Obamacare. In other words, you have to spend money collected in medial plans for medical expenses; not divert it to general business expenses.

  36. Fumanchu says:

    As a business owner, all I can say in this instance is go McDonalds. Fastfood works on really, really slim margins that ANY across the board rise in costs can put an end too. This is doubly true in the age of discouting we are in with programs like the dollar menu.

  37. MacUser1986 says:

    This actually makes me sicker than their food itself use too. McDonald’s is a billion dollar company which operates in every country but Antarctica and they feel the need to drop insurance for 30,000 people? Recession or not this is complete crap I hope it doesn’t happy to those poor people.

    F**K you McDonald’s!

  38. Cicadymn says:

    “If not, maybe McDonald’s thinks its employees are independently wealthy and immune to sicknesses of all kinds”

    I thought that’s why we had to RAM THROUGH HEALTHCARE RIGHT NOW NO TIME TO READ GOGOGOGOGOGOGOGOGOGOGOGOGOGOGOGO BANDWAGON BANDWAGON GOGOGOGOGOGOGOGOGOGGO BILLIONS OF DEAD. SHH DON’T READ IT JUST PASS IT GOGOGOGOG

    Because evil corporations wouldn’t give their employees healthcare so big gubbments had to step in and force everyone to either have some or buy theirs.

    It’s no problem, just let Micky D’s just buy theirs. Who needs choice? This isn’t Burger King, the employee’s can’t have it their way.

    • CreekDog says:

      It was available for you and members of congress to read for months, and the changes made to it in the end also were made available for you and members of congress to read in the lead up to the vote.

      What you are complaining about is another issue, a non-issue, altogether, which was them not taking the time to read the entire bill out loud for however many hours that would take. This is different than giving people time to understand it, instead it was to waste time.

      Since when have you ever understood a comprehensive law by having it read to you?

  39. AEN says:

    Again. McDonalds is NOT complaining that this medical plan costs too much or they can’t afford it – they actually MAKE A PROFIT on this plan. Their complaint is that they are no longer allowed to divert the excess money in the plan to their general business expenses – like marketing for example.

  40. yagisencho says:

    Explain to me again why the public option was removed from the health care bill? Face it, folks: The insurance companies have us all over a barrel. And companies want to remain profitable without raising their prices to match the growing costs of that health insurance.

    IMHO, basic human rights like health care should funded collectively (read: via federal income taxes). Instead, we remain slaves to the insurance industry and *hope* that our coverage is sufficient to keep us alive and out of bankruptcy court.

  41. FrugalFreak says:

    I thought it was the insurance company that had to follow the 85% law, not McDees. Is McDonalds it’s own insurance company? I now mark McDees on my don’t do business with teabaggers.list. This outrage over equal access healthcare is ridiculous because status quo of Republicans have brainwashed the middle class into hyping it up.

  42. u1itn0w2day says:

    I thought I read some where where the plan McDonalds was using or offering was a ‘mini’ care or mid to low range health plan. So wouldn’t that mean things like high deductables and limited options ie lower cost health plan?

    Must admit though I know several years ago alot of the retailers ‘voluntarily’ decided to “offer” every employee health care even if part time. This was in response to many of the lawsuits and media on Walmart for these same issues. Perhaps this was what McDonalds was offering?

  43. Unicorn-Chaser says:

    Not sure why everyone is freaking out over this. Seems like McDonald’s is just making a move to try and preserve it’s bottom line. This is what businesses do. This is why they exist….to make money. Business does not exist to serve it’s employees.

  44. Elsydeon says:

    As humorous as it may sound, McDonald’s does have to compete on price with other fast food chains. The increasing pressure from both increases in min. wage and the poor economy forcing prices down means that benefits have to be cut. 30k employees would seem to be the number of Restaurant General Managers and higher people, not the rank and file making min. wage. Many of them are likely contracted workers and dropping health care would be a breach of that contract. They are not required to provide health care to anyone, just offer it at employee expense as per the COBRA of 1984.

  45. RogerX says:

    C’mon. The obvious has happened. “Healthcare reform” has cause the insurers and employers to pass along the increased costs associated with meeting new regulations in the form of higher premiums and reduced services. I’m out $150 a more a month for lesser coverage this insurance year because of it. Congress effs us again.

  46. DragonThermo says:

    I think it is a great idea for McDonalds, and other Fortune 500 companies, to drop insurance benefits. The companies can save on labor expenses, and the workers can get free insurance coverage from ObamaCare.

  47. jimstoic says:

    I don’t understand: what is the other 15-20% being used for? Paying the HR VP in charge of health benefits?