The Obamacare Chronicles: Delta Airlines to take a $100,000,000 hit

**Posted by Phineas

"Obamacare has arrived"
“Obamacare has arrived”

And it’s not like the airline industry is doing all that well, as it is. But, gee, what’sΒ another hundred millionΒ or among friends?

Delta Air Lines has issued an urgent warning about the impact of ObamaCare, claiming the law’s implementation will contribute to a roughly $100 million increase in health care costs next year alone.

The astonishing figure was included in a letter from Delta executive Robert Kight to officials in the Obama administration. The website RedState.com was the first to obtain and publish the letter earlier this week.

(…)

In the original letter, Kight disputes the notion that the law — the biggest parts of which take effect at the start of 2014 — will mean “business as usual” for big employers. A combination of factors, he claimed, will “mean that the cost of providing health care to our employees will increase by nearly $100,000,000 next year.”

Part of that is normal medical inflation and the phase-out of an assistance program tied to the health care law. But a large chunk of it, the exec claimed, comes from various fees and costs associated with the implementation of the health care law.

One of the costly items pertains to an annual fee of $63 per “covered participant” next year. The company estimates this means a more than $10 million expense in 2014. The catch for Delta is that, because many of their employees insure through Delta, the fee meant to help subsidize the health care law’s coverage amounts to a “direct subsidy” from the company that provides “zero direct benefit to our participants,” Kight said.

Another added cost comes from the requirement to cover children and young adults on parents’ plans until they’re 26 years old. Kight reports that the change led to 8,000 more people being added to their rolls, at an annual cost of $14 million.

There’s more; be sure toΒ read it all.

Delta claims it will absorb the costs the “vast majority” of those new costs, but…. come on. Leaving the exact meaning of “vast majority” aside (95%? 75%? 51%??) and ignoring for a moment that the rest will have to be picked up by employees who may already be stretched (and losing their spousal coverage), airlines operate on paper-thin margins; there will be tremendous pressure to recoup these costs. And that means passing them along to the consumer in the form of higher tickets prices and more fees for anything the airline can think of.

Thus not only does Obamacare not make health care more affordable, but it’s almost certain to make airline travel more expensive, too.Β This is almost a case-study of what happens when government tries to control an economy: the inputs and ramifications are too complex for a few “deciders” to understand, and so we end up with one disastrous unintended consequence after another.

There’s no “fixing it,” regardless of what the Democrats and the Left (but I repeat myself) will try to say in 2014 and 2016. It has to be torn out, root and branch. And if anyone says that’s impossible because there are no alternatives, tell themΒ they lie.

Aren’t you glad the Democrats passed thatΒ anti-constitutional monstrosity, just so we could find out what’s in it?

viaΒ ST

(Crossposted at Public Secrets)

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