Low-wage workers and health care reform

Wal-Mart employee Barbara Kokensparger scans clothing items at a store in Bowling Green, Ohio.

TEXT OF STORY

Kai Ryssdal: The health care story of the day comes to us from McDonald's. The Wall Street Journal reported today that the burger chain has told federal regulators it's only going to be able to keep health coverage for almost 30,000 workers -- if its insurance company could get a waiver for part of the new reform law. McDonald's says the story's not right, that it's committed to providing benefits. But the whole thing does raise at least a question of whether health care reform might make it harder to insure low-wage workers.

Marketplace's Nancy Marshall Genzer has more.


Nancy Marshall Genzer: Many retailers and restaurants offer their workers bare bones insurance plans. Employees pay as little as $14 a week for the coverage.

Neil Trautwein is a health care lobbyist at the National Retail Federation.

Neil Trautwein: It's an important source of coverage within our membership. It's less expensive coverage.

Now, part of the health care overhaul requires insurers to spend at least 80 percent of the premium dollars they take in on medical care -- not on administrative costs and executive salaries. It's called the medical loss ratio rule. Insurers offering the low-cost plans say their administrative expenses are too high to meet the 80-percent requirement.

Ana Gupte is a health care analyst at Sanford Bernstein. She says without the plans...

Ana Gupte: A company like McDonald's would either have to upgrade their policies substantially to more of a major medical offering, or might have to even stop coverage.

A big unhappy meal for everyone involved. But talk of dropping coverage may be premature. The medical loss ratio rule isn't final yet. Until it is, insurers won't have a formula for evaluating what they spend on care.

John Shepard is a health care analyst with Concept Capital. He says McDonald's is just trying to make sure the final rule is to its liking -- by grabbing the headlines.

John Shepard: It's an excellent way to get your concerns heard and maybe get things to turn out a little more favorably towards you.

McDonald's says the Wall Street Journal story is wrong. But it did get lots of attention.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

About the author

Nancy Marshall-Genzer is a senior reporter for Marketplace based in Washington, D.C. covering daily news.

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