NCPA - National Center for Policy Analysis

McDonald's Offers Taste of Obama Sausage-Making

October 12, 2010

Nancy Pelosi wasn't kidding when she said, "We have to pass the bill so that you can find out what is in it."  The public got to peek last week when the Wall Street Journal reported that McDonald's Corp. wanted out of a requirement in the new health care law that compels employers to spend 80 percent to 85 percent of premiums on medical benefits, says BusinessWeek.

  • For McDonald's mini-med health care plan, a low-cost, limited plan covering about 30,000 hourly fast-food workers, the minimum medical loss ratio was economically unfeasible.
  • The company asked for a waiver, according to memos provided to the Journal.

It turns out lots of other companies are seeking waivers for limited benefit plans -- along with some states, like Maine, with a small number of insurers, according to Joseph Antos, a health-care scholar at the American Enterprise Institute.

The gist of the purpose, background and process for filing a waiver is this:

  • The Secretary of Health and Human Services (HHS) is authorized to determine the minimum coverage limits.
  • The Secretary of HHS is authorized to waive those limits if compliance with them "would result in a significant decrease in access to benefits or a significant increase in premiums."

"The law they passed is a shell of a law," says Michael Cannon, director of health policy studies at the Cato Institute.  "Most of the rules have yet to be written."

The McDonald's kerfuffle shined a light on the health care legislation.  With many of the rules to be written and many of the provisions to be phased in between now and 2014, the public got to see how the sausage was made and who gets to make it.

Source: Caroline Baum, "McDonald's Offers Taste of Obama Sausage-Making," BusinessWeek, October 8, 2010.


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