McDonald’s has been in the news recently when it announced that it was considering ending the health insurance benefits that it offers to it’s employees. Since then, the government and McDonald’s have come to an agreement that would allow McDonald’s to avoid having to comply with some upcoming health care regulations. This does not mean that the health insurance plan that McDonald’s offers provides good value to it’s employees.
Some people have argued that having the mini-med health insurance that McDonald’s offers it’s workers is better than having no health insurance at all. But is it? Let’s take a closer look at how this insurance policy works.
The least expensive insurance plan costs workers a little more than $700.00 a year. This gives the worker up to $2,000 of medical coverage. This might be ok for a worker who is generally healthy. It may cover a few doctor’s visits, or a small injury, but the costs paid by the insurance company won’t come close to the amount the worker has been paying in premiums. Once the $2,000 limit has been used up, the insurance stops paying for any health care costs at all, and the worker must pay out of pocket for whatever care is necessary. The most expensive plan costs workers around $1,700 per year, and gives that worker up to $10,000 in benefits. However, this plan stops paying for outpatient treatment after $2,000 of costs have been accrued. One trip to the emergency room could eat up the entire $2,000 cap. After that? It is as though the worker has no health insurance at all, except, of course, the worker would still be paying for it.
Mini-med insurance policies, like the one McDonald’s offers it’s workers, do not give the worker who is paying for the health insurance enough coverage. This tends to result in workers who have to drain their savings accounts in order to pay for medical care, despite the fact that they have health insurance. Another result is that hospitals may have no choice but to let some of these bills go unpaid. In order to recover those losses, the cost of health care goes up. When it goes up, it goes up for everyone. This, in turn, means that insurance companies need to charge higher premiums on health insurance. When that happens, it means that even fewer people will be able to afford a health insurance policy. Bad health insurance hurts us all.
Image by Adam Smith on Flickr