Could one supersize fit all?

Posted by Marc Hodak on September 30, 2010 under Unintended consequences | Be the First to Comment

McDonald’s wrote the government complaining that the loss ratio guidelines mandated by ObamaCare were uneconomical for their “mini-med” plan, and would force them to drop the plan altogether, which would leave about 30,000 of their hourly employees without health care coverage.

Last week, a senior McDonald’s official informed the Department of Health and Human Services that the restaurant chain’s insurer won’t meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care.

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.

Democrats who drafted the health law wanted the requirement to prevent insurers from spending too much on executive salaries, marketing and other costs that they said don’t directly help patients.

McDonald’s move is the latest indication of possible unintended consequences from the health overhaul.

Unintended, perhaps, but not unforeseeable.  The lawmakers were warned that not all policies could economically support an 80% to 85% loss ratio.  But when the term “economically” comes up, congresspersons eyes glaze over, and they simply move on because they can.  “Let the little people worry about the ‘economic’ stuff.  We have financially illiterate voters to cater to, and an innumerate MSM through which to reach them.”

I used to think that Congress truly didn’t intend for “unintended consequences” to occur.  I have long since realized that they either don’t care about those consequences, or they fully intend for them to occur because it will give them a political advantage.  They can create economically unsustainable mandates for insurance carriers, then blame the insurance companies for dropping those lines so their CEO can make a few more bucks.  And the press generally let them get away with that, if not encourages it, because greed is a much easier and better story than economic incompetence.  The average reader doesn’t have to be educated on what greed is.