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ProSense

(116,464 posts)
Thu Mar 28, 2013, 05:01 PM Mar 2013

Fast Food Chains Realize Obamacare Will Cost Them Much Less Than They Predicted

Fast Food Chains Realize Obamacare Will Cost Them Much Less Than They Predicted

By Rebecca Leber

Fast food chains have been some of Obamacare’s biggest critics, issuing warnings of new surcharges, higher costs, and laid-off workers because of the health reform law. Many of them have now changed their thinking. By the new estimates from several chains — including Wendy’s, Popeye’s, Jack in the Box, and Chipotle — Obamacare will actually cost about 80 percent less than they originally warned.

Those include companies whose franchises have already taken preemptive action to avoid providing their employees with health coverage, including one Nebraska Wendy’s chain.

According to the Wall Street Journal:

Wendy’s Co. initially estimated the health-care law would increase the cost of operating each of its 5,800 U.S. restaurants by $25,000 a year. But Chief Financial Officer Steve Hare told an investment conference on March 14 that executives have cut the estimate by 80%, to $5,000 a year, primarily because they expect many employees to decline the insurance offering.

“It is still going to be an additional cost that both the company and our franchisees will have to absorb, but we think it is going to be manageable,” Mr. Hare said.

The CEO of Dunkin’ Brands Group also softened criticism of the law earlier this month, when he explained to shareholders that Obamacare’s costs “are not as high as some people have said” and “we can mitigate those costs very easily.”

Company executives say the reason why they exaggerated their estimates is because workers are opting out of the employer-sponsored high-deductible plan that fast food chains typically offer. Those kind of high-deductible plans are popular ways for large companies to lower their profits, but they’re not always the best choice for low-wage workers...Before exaggerating the impacts of health reform, fast food restaurants could have turned to analyses that showed Obamacare would impose only a negligible cost on large businesses, while actually helping small businesses.

http://thinkprogress.org/health/2013/03/28/1788571/fast-food-obamacare-costs/

What they did was push the anti-Obamacare meme hoping for a Romney Presidency and a repeal of the law. Now they have to explain to investors why their companies aren't going to go under. Basically, they were pushing bullshit.

The Latest Attack On Obamacare Conveniently Ignores The Law’s Cost-Cutting Provisions
http://www.democraticunderground.com/10022578323

Howard Dean on the health care law
http://www.democraticunderground.com/10022560359

27 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Fast Food Chains Realize Obamacare Will Cost Them Much Less Than They Predicted (Original Post) ProSense Mar 2013 OP
Porta John can shove a pizza shovel up his ass Blue Owl Mar 2013 #1
The Fast Food Chains sheshe2 Mar 2013 #2
Will Cost Them Much Less Than They Predicted Flashmann Mar 2013 #3
This is exactly why I "don't do chains".... a kennedy Mar 2013 #27
Obamacare Will Cause Medical Claims Costs To Jump 32 Percent Zax2me Mar 2013 #4
Here: ProSense Mar 2013 #9
Great distinction, thanks. n/t CitizenPatriot Mar 2013 #18
somewhat ironic ... surrealAmerican Mar 2013 #5
Well what good is it if it doesn't bring the cost down for the employees? We need a single southernyankeebelle Mar 2013 #6
I can't help but wonder Cal Carpenter Mar 2013 #7
No ProSense Mar 2013 #11
So basically Cal Carpenter Mar 2013 #12
What? ProSense Mar 2013 #13
Yes, from your post Cal Carpenter Mar 2013 #16
Yes, ProSense Mar 2013 #17
So what is the answer? Cal Carpenter Mar 2013 #20
You made ProSense Mar 2013 #21
Okay, onto the subsidies Cal Carpenter Mar 2013 #22
Are you taking the deductions out of that yearly salary quote? Bolo Boffin Mar 2013 #25
I can't find any detail Cal Carpenter Mar 2013 #26
Think about it, of course most are not buying it. RedRocco Mar 2013 #8
FF places not participating, so they avoid costs quadrature Mar 2013 #10
So If They Decline otohara Mar 2013 #14
Why don't we cut executive pay by 2/3? There's a novel idea! Initech Mar 2013 #15
WOW, all that misunderstanding and sorta Iliyah Mar 2013 #19
K&R SunSeeker Mar 2013 #23
Didn't Papa John's and Chik Fil A find that asshole CEOs shooting their mouths cost Thor_MN Mar 2013 #24

sheshe2

(83,349 posts)
2. The Fast Food Chains
Thu Mar 28, 2013, 05:23 PM
Mar 2013

Went a lot of trouble and great effort was made . . . to obscure or obfuscate the truth. All they wanted was to profit before, conscience.

Thanks for the OP, ProSense.

Flashmann

(2,140 posts)
3. Will Cost Them Much Less Than They Predicted
Thu Mar 28, 2013, 05:37 PM
Mar 2013

Too bad,for them,they didn't think that through before publicly shooting off their mouths about layoffs and hour cuts,and all the other whining.
Those places,Papa Johns,Olive Garden,Red Lobster,prominently head the list of restaurants that'll never see another cent from me.
I'll bet even money I'm not alone.

a kennedy

(29,467 posts)
27. This is exactly why I "don't do chains"....
Sun Mar 31, 2013, 09:51 AM
Mar 2013

always find and pay handsomely the waitstaff at the "mom's or the mom & pop's" restaurants in my area.

ProSense

(116,464 posts)
9. Here:
Thu Mar 28, 2013, 06:11 PM
Mar 2013
The Latest Attack On Obamacare Conveniently Ignores The Law’s Cost-Cutting Provisions
http://www.democraticunderground.com/10022578323

<...>

Another caveat: The Society of Actuaries contracted Optum, a subsidiary of UnitedHealth Group, to do the number-crunching that drives the report. United also owns the nation's largest health insurance company. Bohn said the study reflects the professional conclusions of the society, not Optum or its parent company.

http://www.npr.org/templates/story/story.php?storyId=175375444


surrealAmerican

(11,340 posts)
5. somewhat ironic ...
Thu Mar 28, 2013, 05:41 PM
Mar 2013

... since making fast food less profitable would ultimately benefit the health of Americans.

 

southernyankeebelle

(11,304 posts)
6. Well what good is it if it doesn't bring the cost down for the employees? We need a single
Thu Mar 28, 2013, 05:49 PM
Mar 2013

payer plan period.

Cal Carpenter

(4,959 posts)
7. I can't help but wonder
Thu Mar 28, 2013, 05:54 PM
Mar 2013

about this part:

"...primarily because they expect many employees to decline the insurance offering..."

Is this because they already have coverage from a parent, spouse, or other employer? Or is this because the out of pocket expenses (part of premium, copays, etc) for the worker would be prohibitive anyway so they are still not insured?

Because if it is the latter, I am hard-pressed to consider this any kind of good news.

And this paragraph from that article (now that I've actually gone and read it, heh) really makes me think the latter is the case:

"Company executives say the reason why they exaggerated their estimates is because workers are opting out of the employer-sponsored high-deductible plan that fast food chains typically offer. Those kind of high-deductible plans are popular ways for large companies to lower their profits, but they’re not always the best choice for low-wage workers. For instance, many companies that set up high-deductible insurance plans max out at up to $10,000. They can leave low-income workers worse off, because you can spend more than that sum on a single emergency room visit. "


Really, the point of the ACA is to get more health care coverage to more people. To make it affordable, right? These are the workers who need help the most. Even with the tax credit, they still cannot afford it. So they are still uninsured and possibly paying a tax penalty to boot.

Perhaps I am missing something

ProSense

(116,464 posts)
11. No
Thu Mar 28, 2013, 06:40 PM
Mar 2013

"Really, the point of the ACA is to get more health care coverage to more people. To make it affordable, right? These are the workers who need help the most. Even with the tax credit, they still cannot afford it. So they are still uninsured and possibly paying a tax penalty to boot. "

...most fast food workers are minimum wage earners who will qualify for Medicaid, and for others premiums are capped as a percentage of income. This is another reason the fast food chains were full of shit. Nearly 17 million more people will qualify for Medicaid.

<...>



Guys, this is a major program to aid lower- and lower-middle-income families. How is that not a big progressive victory?

http://krugman.blogs.nytimes.com/2009/12/26/numerical-notes-on-health-care-reform/


Who Benefits from the ACA Medicaid Expansion?

A key element of the Affordable Care Act (ACA) is the expansion of Medicaid to nearly all individuals with incomes up to 138 percent of the federal poverty level (FPL) ($15,415 for an individual; $26,344 for a family of three in 2012) in 2014. Medicaid currently provides health coverage for over 60 million individuals, including 1 in 4 children, but low parent eligibility levels and restrictions in eligibility for other adults mean that many low income individuals remain uninsured. The ACA expands coverage by setting a national Medicaid eligibility floor for nearly all groups. By 2016, Medicaid, along with the Children’s Health Insurance Program (CHIP), will cover an additional 17 million individuals, mostly low-income adults, leading to a significant reduction in the number of uninsured people.

Medicaid does not cover many low-income adults today. To qualify for Medicaid prior to health reform, individuals had to meet financial eligibility criteria and belong to one of the following specific groups: children, parents, pregnant women, people with severe disability, and seniors. Non-disabled adults without dependent children were generally excluded from Medicaid unless the state obtained a waiver to cover them. The federal government sets minimum eligibility levels for each category, which are up to 133% FPL for pregnant women and children but are much lower for parents (under 50% FPL in most states). States have the option to expand coverage to higher incomes, but Medicaid eligibility levels for adults remain very limited (Figure 1). Seventeen states limit Medicaid coverage to parents earning less than 50 percent of poverty ($9,545 for a family of 3), and only eight states provide full Medicaid coverage to other low-income adults. State-by state Medicaid eligibility levels for parents and other adults are available here.



The ACA expands Medicaid to a national floor of 138% of poverty ($15,415 for an individual; $26,344 for a family of three). The threshold is 133% FPL, but 5% of an individual’s income is disregarded, effectively raising the limit to 138% FPL. The expansion of coverage will make many low-income adults newly eligible for Medicaid and reduce the current variation in eligibility levels across states. To preserve the current base of coverage, states must also maintain minimum eligibility levels in place as of March 2010, when the law was signed. This requirement remains in effect until 2014 for adults and 2019 for children. Under the ACA, states also have the option to expand coverage early to low-income adults prior to 2014. To date, eight states (CA, CT, CO, DC, MN, MO, NJ and WA) have taken up this option to extend Medicaid to adults. Nearly all of these states previously provided solely state- or county-funded coverage to some low-income adults. By moving these adults to Medicaid and obtaining federal financing, these states were able to maintain and, in some cases, expand coverage. Together these early expansions covered over half a million adults as of April 2012.

Eligibility requirements for the elderly and persons with disabilities do not change under reform although some individuals with disabilities may become newly eligible under the adult expansion. Lawfully residing immigrants will be eligible for the Medicaid expansion, although many will continue to be subject to a five-year waiting period before they may enroll in coverage. States have the option to eliminate this five-year waiting period for children and pregnant women but not for other adults. Undocumented immigrants will remain ineligible for Medicaid.

- more -

http://www.kff.org/medicaid/quicktake_aca_medicaid.cfm


How Obamacare Will Help Extend Health Care To Part-Time Workers
http://www.democraticunderground.com/10022309389


Cal Carpenter

(4,959 posts)
12. So basically
Thu Mar 28, 2013, 07:20 PM
Mar 2013

Last edited Thu Mar 28, 2013, 08:11 PM - Edit history (1)

if you are making just over a full-time minimum wage you cannot qualify for medicaid. Those people cannot afford it either. Or, say, a mom with 2 kids trying to live on $30k. Maybe the kids will still get care but she likely won't.

There are cracks that millions will fall through.

And what about assets? IIRC, that is considered in medicaid eligibility. Is that being waived? What if someone lives in an old family home worth $60k? Are they disqualified? I didn't see any mention of that in the KFF link.

We need single payer. We do not need more dependence on primarily for-profit insurance companies.

The ACA is essentially a neo-liberal policy. It embeds the health insurance companies even deeper into the fabric of our basic needs, using our tax dollars to do so.

Frankly, it's not good enough. I refuse to stop looking at it critically.

Expanding medicare to all would have ultimately been cheaper and easier.

The proof will be in the numbers, in 3 or 5 or 10 years, when we compare the US healthcare outcomes to other 'civilized' countries. The costs and the health and the 'universality' of this. We'll see.

ProSense

(116,464 posts)
13. What?
Thu Mar 28, 2013, 07:22 PM
Mar 2013

"So basically if you are making just over a full-time minimum wage you cannot qualify for medicare. Those people cannot afford it either. Or, say, a mom with 2 kids trying to live on $30k. Maybe the kids will still get care but she likely won't. "

What are you talking about? Did you actually read the information?



Cal Carpenter

(4,959 posts)
16. Yes, from your post
Thu Mar 28, 2013, 07:40 PM
Mar 2013

$15,415 for an individual is the max income. Did I read that wrong? It is bolded. That would be just a hair over a full time min wage job.

Sorry, signing off for awhile

ProSense

(116,464 posts)
17. Yes,
Thu Mar 28, 2013, 07:46 PM
Mar 2013

"Did I read that wrong?"

...you read it wrong, and the minimum wage point wasn't the only one you made.

Cal Carpenter

(4,959 posts)
20. So what is the answer?
Thu Mar 28, 2013, 08:09 PM
Mar 2013

Your post says that $15415 is the income below which an individual qualifies for medicaid. That would be a full time job at $7.40 or so.

I used the min wage as a sort of benchmark - a full time federal minimum wage job would be $15,080 per year.


My other example was actually generous, your post says a family of three qualifies up to $26k or so. I said $30k in my example.

What am I missing here, how do people who make more than that qualify for medicaid?

ETA: Realized I said medicare in a post a few up, when I meant medicaid, that may be the source of some of this confusion, but my conclusions still stand.

ProSense

(116,464 posts)
21. You made
Thu Mar 28, 2013, 08:22 PM
Mar 2013

"My other example was actually generous, your post says a family of three qualifies up to $26k or so. I said $30k in my example. "

...a lot of assumptions base on your bias against the law. In fact, a family of three with income of $30,000 would see 90 percent of their premium subsidized.

Also, this statement from your preivious comment, "The ACA is essentially a neo-liberal policy," is fairly silly in the context of this discussion.

I mean, in talking about expanding Medicaid, a program Republicans have always despised, to claim that a law that represents the biggest expansion of the safety net since Medicare, is "neoliberal" is silly.

Cal Carpenter

(4,959 posts)
22. Okay, onto the subsidies
Thu Mar 28, 2013, 10:57 PM
Mar 2013

Last edited Sun Mar 31, 2013, 08:32 AM - Edit history (1)

So I was right about the Medicaid stuff and you can't answer my question about the assets.

Anyway, now you want to talk about the subsidies. There is a large swath of people who will struggle to use their insurance with subsidies through an exchange.

Here's a more accurate example:

for a family of three at $39,060 income (200% of 2013 FPL).

The subsidy will provide these limits:

Premiums - max 6.3% of income = 2460.78

Other Out-of-pocket expenses = 5950.50

That is a total of $8,411.28 that the family could pay, out of their $39,060 income.


This is based on a link here: http://101.communitycatalyst.org/aca_provisions/subsidies (there is a ton of info on that site about many aspects of the program)


Employer coverage provided outside of the Exchange for low-wage workers, as described in the article you posted in the OP, tend to be very minimal in coverage with high deductibles, copays, etc. The benchmark plans through the exchange are not exactly great coverage from what I can find, and better plans with lower deductibles, copays, co-insurance, etc are more expensive and the difference is not subsidized.

This is still not 'affordable' to many people in many situations. If one family member has a major emergency or serious illness, these amounts may be prohibitive, or may still result in serious debt. If unexpected expenses come up, car repairs for example, that could mean no money for copays for office visits or meds. $30 or $50 or $100 is not always there when you need it at such wages.

“People who cannot afford coverage” are defined as those who would pay more than 8% of their household income just on premiums. Just think, being low-wage, living month to month, how important that 8% of your income may be. A whole lot of America lives that way. Their whole lives. Because wages suck (and that's a whole nother thread)

There are millions who will fall through the cracks. Some will get no insurance at all. Others who, in some nominal way, have 'insurance', will still be unable to access affordable health care in many cases, which has been a major problem all along.

As for the neo-liberal comment – those subsidies you refer to are ultimately not going to subsidize health CARE. They are going to subsidize mostly for-profit INSURANCE and other highly profitable health industry companies. They are tax dollars subsidizing a for-profit industry, in order to...what...reward it for making our health care system one of the worst in comparable nations in both cost and outcomes? If you don't see how this fits with neoliberalism, just read the first paragraph on the wiki page about it. “...increasing the role of the private sector in modern society...”

It is unconscionable that with all the wealth in this country, we can't manage to wrangle some to provide basic public health, something done successfully and efficiently in nations much poorer than ours.

We are 30 steps behind where we could be. This set of laws may take us 3 or 4 steps forward in the most superficial sense. But given the depths of the problems, the inequalities, the inefficiencies, the needless layers of waste and profit, it's more like 1 step forward, 2 steps back.


edited: since this thread got kicked back up, my original example (now removed) wasn't precise, as I was using older FPL numbers from memory - there is a new example above based on 2013 guidelines.

Bolo Boffin

(23,796 posts)
25. Are you taking the deductions out of that yearly salary quote?
Sat Mar 30, 2013, 09:22 PM
Mar 2013

Just checking. This would be based on taxable income, I thought.

Cal Carpenter

(4,959 posts)
26. I can't find any detail
Sun Mar 31, 2013, 08:27 AM
Mar 2013

implying that this is based on taxable income vs total income. Every analysis I have seen just says 'income' or 'household income' in relation to the FPL (Federal Poverty Level). Generally, the FPL (on which these levels of ACA subsidy etc are based) is looked at as total income, not an adjusted income.

I would be interested in finding out if it is otherwise in the case of the ACA qualifications.

RedRocco

(454 posts)
8. Think about it, of course most are not buying it.
Thu Mar 28, 2013, 06:06 PM
Mar 2013

At minimum wage, just how much do you think a fast food employee can pay?
My g/f brought home an insurance package from carl jr/hardees. It was almost $200 every 2 weeks. Needless to say she couldn't afford it.

Initech

(99,915 posts)
15. Why don't we cut executive pay by 2/3? There's a novel idea!
Thu Mar 28, 2013, 07:26 PM
Mar 2013

Stop screwing us over for private jets and golf courses. Obamacare isn't going to cost as much as you think. Douchebags.

Iliyah

(25,111 posts)
19. WOW, all that misunderstanding and sorta
Thu Mar 28, 2013, 08:01 PM
Mar 2013

sounds like MEDICARE when enacted during Regan time where Regan and the GOP party claimed that MEDICARE would doom us all.

 

Thor_MN

(11,843 posts)
24. Didn't Papa John's and Chik Fil A find that asshole CEOs shooting their mouths cost
Sat Mar 30, 2013, 09:17 PM
Mar 2013

a lot more than expected?

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