A report in Wednesday's New York Times that the Obama administration has been issuing waivers to allow many businesses to evade the provisions of the new health care reform law is arousing widespread debate.
"As Obama administration officials put into place the first major wave of changes under the health care legislation," the Times explains, "they have tried to defuse stiffening resistance -- from companies like McDonald’s and some insurers -- by granting dozens of waivers to maintain even minimal coverage far below the new law’s standards."
According to USA Today, the Obama administration has already granted waivers to 30 companies, including McDonald's, meaning that "nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs."
Last week, the Wall Street Journal reported that McDonald's had warned federal regulators "it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul."
McDonald's provides a "mini-med" plan for its workers, under which they can pay $14 a week for a "basic plan" that offers maximum annual benefits of $2000 or about $32 for a somewhat higher limit. The company and trade groups argue that plans of this kind have high administrative costs which prevent them from meeting the new requirement that insurance providers must spend at least 80% to 85% of premiums on medical care.
The details of the "mini-med" plan -- which would barely begin to cover any significant medical emergency and which one news site dubbed "junk insurance" -- have already drawn the attention of Sen. Jay Rockefeller (D-WY), a member of the Senate Commerce Committee, who wrote to the CEO of McDonald's insurer asking him to "help the Committee understand the costs and benefits of the insurance products you are selling to McDonald’s employees."
As soon as McDonald's had threatened it might drop coverage altogether if it did not receive a waiver, however, the Obama administration announced that Health and Human Services Secretary Kathleen Sebelius did have the discretion to provide such waivers, although any decision might not come until December.
It now appears, however, that the waivers were already in the process of being issued even as the administration indicated it was still considering the matter. USA Today notes that "The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether."
Political considerations appear to be central to much of the process. According to the Times, "How much the administration can, or should, compromise in ways that could dilute the effect of the new law in the next few years is a subject of much debate. ... Nancy-Ann DeParle, the director of the Office of Health Reform at the White House, acknowledged that the concessions given to companies and insurers reflected attempts to avoid having people lose their current coverage before the full law goes into effect [in 2014] while meeting the aim of improving that coverage."
"It is a balancing act," DeParle told the Times. "The president wants to have a smooth glide path to 2014."