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The Obama administration has granted dozens of waivers to companies so they do not have to comply to the health care reform.
McDonald’s released a statement that their current health plan to the hour employees would not meet the health care reform requirements. So the administration granted them a one year wavier reported by the New York Times. This is just one of dozen of waiver that have bee granted.
Limited benefit plans have granted waiver because there is no way they can be compliant with reform. I think the administration did not take these types of plans into consideration when they past health care reform. To the surprise of the current administration these type of plans have a lot of membership in this country. The health care reform basically does a way with these type of plans. Limited benefits plan can not comply with any aspect of health care reform.
We are also seeing waivers granted to certain Union groups. The speculation on why they are being granted waivers is that health care reform actually reduces some of their benefits. Durable medical is unlimited under essential benefits but could apply towards some cost share. Under some current plan designs durable medical is covered at 100% but capped. So by shifting the cost on to the insured could be view as a reduction in benefits thus losing any grandfather status. With that kind of shifting it could also be a labor contract violation. Lots of red tape to where it might be easier for the administration to give a one year waiver.
As the first major aspect of health care reform takes place we are already seeing difficult implementation in all areas. States are already seeing smaller carriers pull out of certain markets. In the next couple of months the Medical Loss Ratio will be released. This is the law that carriers must spend 80% or 85% of premium on claims. This law will have a huge impact on small group and individual markets. The fear in the industry that carriers will just exit these markets thus reducing competition.
