Yesterday, the Senate Committee on Commerce, Science, and Transportation held a hearing about the administration’s decision to exempt so-called mini-med plans — subprime insurance offered to lower wage employees — from certain requirements in the Affordable Care Act that are intended to protect Americans from insurance abuses until they can purchase more comprehensive coverage from the state-based exchanges in 2014. Democrats criticized employers like McDonald’s — which had warned federal regulators that it could drop its health-insurance plan for 30,000 hourly workers unless regulators waived certain requirements — for selling insurance that “give workers a false sense of protection from expensive illnesses” and argued that “workers would be better with no coverage at all since they could redirect their premiums to spending on their medical care.” Mini-med insurance plans often restrict the number of covered doctor visits or impose a relatively low maximum on insurance payout and beneficiaries often have “no idea of how limited the coverage is.”
During one exchange with Richard Floersch, McDonald’s Corporation Executive Vice President and Chief Human Resources Officer, Sen. Barbara Boxer (D-CA) highlighted the discrepancy between how much the company contributed to the health plans of its lowest wage workers — who presumably would have the hardest time keeping up with growing health care costs — and corporate executives:
BOXER: Mr. Flourish, what percentage of these low income peoples’, health care plans do you pick up? […]
FLOERSCH: Anywhere from 10 to 20% of the hourly employees that we’re talking about.
BOXER: Okay. What do you pick up for your corporate people?
FLOERSCH: We pick up 80% for our corporate people. We pick up 80% for our restaurant managers. We pick up 80% for our certified swings….70% of for our executives […]
BOXER: Explain that to me. The people who earn the least you pick up the least of their premiums… you are telling me with a straight face that an hourly employee could afford the same level of coverage that you get? No. And what you do is, you pick up hardly anything of the lowest income people and if you look at — Do you know what, for example, starbucks pays for its workers? 75%.
Boxer suggested that the company could afford to pay a higher percentage towards the health care of its lowest wage employees, noting that the company posted a $4.5 billion profit in 2009. “I’m just saying that you pick up 70 to 80 percent of your higher income workers and 10 to 20 per of your lowest workers,” she said.