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Yes, Higher Wages Benefit Workers

Laurel Lucia
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A recent LA Times story profiled a fast-food worker who, according to reporter Don Lee, would lose eligibility for Medicaid if his wages were raised to $15. His wage gains could be “wiped out” by the higher health care costs he’d end up paying. Lee’s portrayal was inaccurate and misleading.

The story centers on 53-year-old Douglas Hunter, a Chicago McDonald’s cook and a leader in the Fight for $15, a national movement of fast-food workers who are pushing for $15 in hourly wages and the right to form a union without employer retaliation.

Hunter is currently enrolled in “CountyCare,” a Medicaid managed care plan that pays for his health care, including more than $700 per month in medications and supplies he needs to manage his diabetes, cholesterol, and blood pressure. Contrary to Lee’s assertion, Hunter would still qualify for Medicaid based on his income if his wage were raised to $15. That is because Hunter is a single parent who works between 24 and 26 hours per week on average, fewer hours than he would like.

Lee also failed to take into account the alternative options for health care available under the Affordable Care Act (ACA). Depending on their income, lawfully present workers who lack job-based coverage and earn too much to qualify for Medicaid may be eligible for financial help in purchasing insurance under the ACA.

If Hunter were able to work the 40 hours weekly he desires and earned $15 per hour, he would lose eligibility for Medicaid. However, under those circumstances, he said it would be “no issue” to pay the $158 monthly premium contribution for the subsidized “Silver” plan he would be eligible to purchase through healthcare.gov. “I want to take care of myself. I want to be like every other American who can pay for their own health care,” said Hunter.

Federal subsidies would reduce the cost sharing under the plan to a $100 annual deductible, $10 primary care visit copayment, no charge for preventive care or generic drugs, and $30 copayment for preferred brand drugs.

Even after taxes, most of Hunter’s take-home wage increase would remain after paying his health care expenses. He would have money left over even if he spent the maximum amount allowed on out-of-pocket expenses under his plan, at which point the plan would pay 100% of his covered services.

Hunter is the single parent of a high school junior who would continue to be eligible for Illinois’ All Kids health coverage program through age 18 even if Hunter’s wage increased to $15, regardless of how many hours he works. The family would owe no monthly premium for her coverage, but if Hunter’s hours increased a $15 monthly premium may be charged.

While a $15 wage “would definitely help,” Hunter emphasized that he is also fighting for a union. “A union brings benefits with it, that’s why I’m pushing so hard… benefits like certain hours guaranteed, medical, and dental. That’s what I’ve been arguing all along—McDonald’s should be paying medical, dental, and vision. They’re making $6 or $7 billion a year.”

It’s clear to Hunter that he and other fast-food workers would be better off with a $15 wage, which is not the picture painted in Lee’s story. Hunter said “Without a doubt, I wouldn’t be fighting for it if I thought it would hurt me or others… An increase in pay would better me, my kids, my grandkids, and my community.” Hunter is right.