There is a huge difference between coverage being adequate for the needs of 85% of a given population and 85% of people being happy with what they’ve got. Huge.
And those other 15%? They’re not just a random outlier. Those aren’t people currently “unsatisfied” with their coverage. Those are people with medical bills so big they and their families went bankrupt trying to pay for it.
It’s worth bearing in mind that a large portion of the administrative cost of the US system is inherent - it’s due to coverage questions.
The UK NHS (by way of example) doesn’t have to worry about whether it’s the primary payor for a medical procedure. If the patient has a national insurance number, it is. That’s whole buildings full of administrators, lawyers, nurse case managers and so on who don’t appear in administrative costs, because they don’t exist.
If Republicans were serious about tort reform, they’d demand a single payer system.
Quite simply actually. In many, many countries, health insurance is not provided or arranged by the employer. It is provided by a government health insurance plan. In this way, everyone is covered under the same policy, and receives the same benefits.
There is also no problem about changing or losing insurance if you change jobs, which makes the workforce more mobile and nimble.
It also enables a focus on preventative medicine, instead of reacting to major health issues after they happen.
You should try it - it works all over the world!
Is there a truly unbiased place to find info on everything that the current healthcare changes will make? I’m a reasonably smart person, and I feel like both sides spin the issue to whichever extreme favors them.
What also annoys me is that, whether I agreed with the Democrats or not, I wanted them to push through the purest version of their vision that they possibly could, instead of capitulating. No mandatory coverage, for example, seems to pretty much sink the cost feasibility of anything approaching universal healthcare. So now, if/when it fails, those who are against it or don’t know better can point at the failure and “know” that UHC can’t work in the U.S., when all it really means is that it was pushed half-assed through.
And in the end, the current state of affairs is likely to fail, and end up costing tax payers even more, all for nothing.
How is it the private sector’s fault? It says it’s sufficient for 85% of the people. In order to provide more benefits to meet the requirement by law, the money has to come from somewhere.
It can come from the employee, charging them more to reduce the relative amount of administrative overhead. That’s a horrible idea becasue most of them are happy with it and don’t need or want more coverage, but would be forced to pay for that unwanted/unnecessary coverage to meet an arbitary amount, and it would come out of their already low salaries and just drive them further into poverty.
It can come from the company, but that increases the cost of business for these companies. As a response, they either raise their prices, which increases cost of living for everyone, further hurting their already low paid employees, or they lay off enough people to make up the difference, which obviously hurts those people even more. Worse, raising their prices puts them at even more of a disadvantage in an industry where most of their competitors don’t even provide any insurance.
It can come from the government, but this means higher taxes and a more socialized system. This is probably how companies like McDonald’s can get by with those sorts of systems in other countries, because medicine is more socialized than it is here.
The first two options just aren’t good because you’re providing generally unwanted and unneeded insurance and it’s hurting the people it’s supposed to be helping. For the third, it may be a viable option, I’m not really interested in debating that topic here, but that’s not something McDonald’s or Aetna has any control over.
I’m not saying mini-med is some awesome kind of insurance, but even crappy coverage is better than no coverage. Even with crappy insurance, it allows people to go see a doctor rather than going to the ER for trivial things, unnecessarily backing it up, and passing on that much more expensive bill to the public. Thus, the more that have even crappy coverage, the more that crappy coverage can actually cover
And it’s not McDonald’s fault that the coverage is crappy. It shouldn’t be a surprise that the turnover at McDonald’s is high and, thus, the administrative costs are correspondingly higher. Holding that kind of insurance to the same standard of companies that have lower turnover and, thus, lower administrative costs, just doesn’t make sense.
So, sure, it’s crappy coverage, but they’re already providing coverage when most of their competitors aren’t. If they drop their coverage because of this law, they’re just going back down to the standard, and now the 85% who are happy with their coverage get screwed because of an arbitrary value in the law. So, short of government involvement, in either exempting them or somehow helping to make up the difference, I just don’t see how McDonald’s or Aetna is in the wrong.
But oddly enough not in either Germany or Taiwan, the two cases I cited. In those countries (‘Bismark model’), insurance is provided by companies which compete for business.
Interestingly, the British Columbia health insurance plan costs $684/year for a single person. And yet, there is no “cap” on your coverage. Go figure. Of course there is not one single person hired anywhere in the province to “deny a claim”, so there’s some savings there. Plus, my doctor does not have to hire anyone to get his money from multiple insurance companies.
Is the US looking at those countries to see how things can improved in the USA? (serious question)
Well, sure but that can never work in America because … mumble mumble mumble.
The OP is incorrect - Aetna is another company bitching about the new medical loss ratio rules. McDonald’s mini-med plan is not administered by Aetna.
That line about sufficiency for 85% of the people is misleading. From the article quoted in the OP:
Well, no shit. Most people don’t have medical expenses of $5000+ in any given year. However, considering the basic plan benefit is $2000 per year, not $5000, and that the majority of subscribers surely go for the lowest cost plan, any claim that the plan is sufficient for 85% of covered employees is a lie.
What this means that every single year well over 15% of covered McDonald’s employees have medical expenses that aren’t covered. In fact, all of them do, because the plan includes high co-payments and only covers 70% of inpatient hospital treatment.
Basically, McDonald’s employees who buy this plan benefit if they incur between $800 and $2000 in medical expenses in any given year. If they incur any amount above or below this range, they’re getting fucked.
That’s not insurance; that’s a ripoff. In fact, McDonald’s employees will be doing a whole hell of a lot better if this plan has to be dropped.
But McDonald’s is trying to be exempted from the new rule. That is to say they are asking to be allowed to keep ripping off their hourly workers.
You may be right that it’s not something McD’s or Aetna can help right now, but this problem just serves as another illustration why private employer-based insurance in America is dysfunctional. The law hurts mini-med plans, sure, but mini-med plans exist only because of the current insurance infrastructure. Government-run insurance wouldn’t give two shits about how much turnover any one company has.
McDonalds actually backpedaled on the reported coverage drop this morning: link.
Oh, and the mini-medical plan they’re paying for costs under $120 a month:
I’m not saying it’s a fabulous plan - it’s not - but the premiums quoted in the thread ($700-ish) are inaccurate. Of course, that’s the price according to McDonalds.
It’s a $700-ish a year premium.
Oh - sorry. Whenever I see premium, I always assume monthly. Thanks.
That’s what I thought at first too, which would be insane. The WSJ article linked in the OP lays out the plan fees in a sidebar, though.
Actually, it appears as if the entire story is bogus. the WSJ is in such a hurry to discredit the new health care law that they essentially made it up.
The money quote:
Steve Russell, senior vice president and chief people officer McDonald’s USA, responds in a statement: “Media reports stating that we plan to drop health care coverage for our employees are completely false. These reports are purely speculative and misleading.”
If you’re going to make a claim like that, you’re going to need to back it up. Why would you assume that the majority would go for the cheapest when they could just as easily choose to get nothing? Surely, nothing is cheaper than something. How can you make any sort of assumption about the needs of the employees? What if they have kids, have a health condition, regularly get sick? Surely they’ll choose more. Similarly, I imagine a lot of single people and high school students that work there can probably get away fine with lesser insurance and still not exceed their coverage.
No… If I have $5000 in medical bills, but only get reimbursed for $2000 of it, they still benefit compared to not being covered. And complaining about a lower bound is silly too. I haven’t ever had an accident, so you could argue that every year I pay into my car insurance and don’t get in a crash that I’m getting fucked, but that’s the cost of insurance.
I agree that it’s not good coverage, but I disagree that they’re necessarily better off without it. I imagine for many of them, who maybe get sick a couple times, and get a routine physical, it’s good. Sure, if they get some serious illness, they’re not covered, but they wouldn’t be covered if they had no insurance either.
An advantage of coverage that you’re neglecting is that, without coverage, many people will often wait until they’re very sick, go to the ER, and rack up a huge bill they can never afford. These sorts of things end up getting passed on to everyone else which ultimately drives up the price for everyone. Instead, with even crappy coverage, they can see a doctor sooner and cheaper, because they have coverage, and they are less likely to get as sick. Hell, with insurance, they can get regular preventative screenings that could easily save their lives that they won’t get without insurance.
And that’s the point. McDonald’s doesn’t HAVE to provide this insurance, and they’re being villified for providing it as an option, when many of their competitors don’t even do that much. That’s the part I don’t get here. If you want to argue that it’s not “real” insurance, I can probably get on board with you, but arguing that it’s worse than nothing just doesn’t make sense to me.
I’m still astonished by how crappy the coverage is. I work full-time, and pay about that much to cover damned near everything that’s done at in-network locations, and I could cut that almost in half if I got a good PPO plan instead (more flexibility, somewhat higher payments for visits/procedures).
I’d think that considering their sheer number of employees, they could get a better deal.
This story makes no sense. There is no requirement that every plan sponsor (McDonald’s in this case) spend at least 80 or 85% of premiums on medical costs. The actual requirement will be that **insurance companies **spend at least that much on costs in aggregate, probably at a state/product/segment level but possibly at at national/product/segment level. So, at least 85% on large group HMO plans in PA, or 80% on individual HMO in NJ, for example.
McDonald’s almost certainly self-insures this coverage, which means Aetna or whomever will administer the coverage, but McDonald’s will pay the actual medical costs of its employees. Self insurance is especially common on mini-med coverage, as there’s much less variability than for major medical, and it is typically cheaper for a company to self-insure in this instance. However, McDonald’s has no responsibility to ensure at least 80% of its premiums are spend on medical costs. It’s in fact Aetna’s responsibility to ensure this takes place on ALL of their self-insured mini-med business (possibly broken down by state). McDonald’s is unaffected by this requirement except that Aetna is charged with determining the required premium across all of their business in aggregate to satisfy this requirement.
Note that this is just my understanding of the law as it currently stands, as the federal government has not issued clear guidance on this requirement yet, so it is impossible to say exactly how this minimum loss ratio will impact the insurance business. But it’s definitely the case that McDonald’s has no responsibility here.