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Re: Delta Air Lines:

Posted by **murray** on Aug 25, 2013 at 10:24:19 AM:
In Reply to: Re: Delta Air Lines: posted by **fishamaphone** on Aug 25, 2013 at 4:15:49 AM:

******Next Year, Our Health Care Costs Will Increase By 'Nearly $100 Million'
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******We know that Obamacare will significantly increase the cost of individually-purchased health insurance in nearly every part of the country. But we’ve generally assumed that disruptions in the market for employer-sponsored health insurance will be less severe. In particular, large employers who self-insure should be exempt from most of Obamacare’s most onerous regulations. It turns out, however, that even America’s largest companies face higher costs due to the health law. A recently-leaked letter from Delta Air Lines to the Obama administration states that the “cost of providing health care to our employees will increase by nearly $100,000,000 next year,” much of it due to Obamacare.
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******Executives from several large Atlanta-based companies met with a member of the Obama administration in Atlanta in early June. There, the executives explained to the administration official how Obamacare was affecting their businesses. Robert Kight, Delta’s vice president for global human resource services and labor relations, wrote a follow-up letter to the official, detailing Delta’s concerns. Apparently, Delta then circulated the letter among its employees, who then sent it to Erick Erickson of RedState.com. The full text of the letter is appended to this article.
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******“Make no mistake,” writes Kight. “The costs imposed on Delta and our employees are very real and they are escalating. [Obamacare’s costs], when combined with normal medical inflation and the end of the [Early Retiree Reinsurance] program mean that the cost of providing health care to our employees will increase by nearly $100,000,000 next year.”
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******Self-insurance vs. normal insurance
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******It’s important understand how self-insurance works. Traditional insurance works this way: you and others pay premiums to an insurance company. The insurance company collects those premiums, and pays for the contracted-upon health expenditures incurred by you and other policyholders. The insurer keeps an additional amount of money in reserve, in case the amount it has to spend on health claims exceeds what it collected in premiums. The insurer has overhead expenses—let’s say 15 percent of premiums—which include its labor costs and perhaps a small profit margin.
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******Self-insurance works a different way. Many large employers, instead of paying premiums to an insurance company, cut out the middleman and pay directly for the health costs that their workers incur. This involves additional financial risk for the employer, but the company saves money that would otherwise go to an insurer’s overhead.
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******And there’s an additional benefit. Under Section 514 of the Employee Retirement Income Security Act of 1974, or ERISA, companies who directly fund their workers’ health benefits, instead of purchasing health insurance on their behalf, are not bound by state insurance regulations. Because state insurance regulations often act to drive up the cost of health insurance, many companies—especially large ones with a broad risk pool—are better off if they self-insure their workers.
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******ERISA plans are also exempt from a number of Obamacare’s regulations. But the new health law does impose a number of mandates on self-insuring employers. Firms with more than 200 full-time workers must “automatically enroll new fulltime employees in one of the plans offered.” ERISA plans must pay a fee to fund “patient-centered outcomes research” and cover a number of mandated health care services. Their ability to install annual or lifetime limits is constrained, as is their ability to expand deductibles, co-pays, and other cost-sharing mechanisms.
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******Several Obamacare provisions are increasing Delta’s costs
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******The Delta letter specifies a number of Obamacare provisions that are increasing their costs. The law charges Delta a “reinsurance fee” that goes toward funding the law’s subsidized insurance exchanges. But Delta employees get coverage from Delta, not from the exchanges; hence, the fee is effectively a $10 million tax on Delta for other government purposes.
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******The oft-noted provision of the law that requires employers to cover “adult children” up to the age of 26 has also driven up Delta’s costs, according to the letter. “More than 8,000 children [have been] added to our rolls resulting in a permanent increase in our overall costs of about $14 million per year.” According to Delta, these added children have higher-than-average health costs, which has had the added effect of increasing premiums for other employees.
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******In addition, the individual mandate—the provision in the law that requires most individuals to purchase health coverage—means that a number of Delta employees who turn down the firm’s offer of coverage will now accept it. That will add another $14 million to Delta’s costs.
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******Delta doesn’t like Obamacare’s “Cadillac tax” on high value insurance plans. But that’s because the tax is doing exactly what it should do: motivating employers to pare down on costly plans that drive premiums upward.
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******Delta says that its health care costs will increase by $100 million next year. That’s a staggering sum, even for a large company like Delta. It’s not clear exactly how much of that sum is due specifically to Obamacare, and how much is due to health inflation and the end of Obamacare’s Early Retiree Reinsurance Program, a $5 billion fund used to encourage employers to continue providing health benefits to early retirees in the near-term. But the three provisions described above amount to $38 million, and that doesn’t include increased cost of insurance due to Obamacare’s benefit mandates, which should amount to a significant additional sum.
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******Regulatory uncertainty is a significant problem
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******The letter also complains about other aspects of the law, such as the employer mandate, which “may unnecessarily impose HR information systems changes that will be costly to build and maintain” due to their complexity. “There are many unsettled principles surrounding this provision of ACA,” Kight writes, “and based on the fact that it is already June, employers will not have time to react should final regulations be issued this year. This puts employers at risk of being assessed these penalties in innocent situations (such as when employees take voluntary leaves of absences) and imposes additional costs, even in those situations where the vast majority of employees are offered affordable, comprehensive coverage.”
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******This is one of the most problematic aspects of Obamacare: the fact that the Obama administration has missed dozens of deadlines to issue important regulations related to the law. Employers sit around waiting for these regulations to drop, knowing that they must reorganize their businesses to comply, or pay steep penalties. But as the clock ticks, and we get closer to 2014, companies have less and less time to adapt to new regulations, increasing the potential for disruption and higher costs.
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******President Obama keeps insisting that, “for the 85 percent of Americans who already have health insurance,” life will be even better than it is today. But that’s patently untrue. The so-called “Affordable Care Act” will make health care less, not more, affordable.
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******and just WHO do you think is going to pay for it?
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*****That's one way to look at it. What is $100 million? Two or three airplanes? What is the cost of personnel who have no health insurance? That costs money too. If I had a choice of going to work for an employer who provided or helped provide health insurance vs one who didn't, which one do you think I'd choose? The cost of hiring/training/mentoring new employees is very high. And if you're getting the also-rans who couldn't find a job at a more prestigious company -- one that provides employee benefits -- then there will be performance problems, don't kid yourself.
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*****Let me ask you this: do YOU have health insurance? Do YOU have to worry about the cost of your next illness/treatment/operation? I'm guessing you do. Most people who are opposed to "Obamacare" are sitting pretty when it comes to their own circumstances. They just don't give a shit about anyone else.
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**** That's a crass generalization. Those who believe there is a better way to do it are not totally lacking in compassion because they do not consider Obamacare to be the only or the best way to tackle the problems...
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***Personal note: had Obamacare been enacted 5 years ago, my mother would still be living in the US. Most Americans, however, don't have dual citizenship in a country with socialized medicine, and can't do what she did. Had she *not* moved, there is no doubt in my mind that she would today be dead.
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***Are you ignoring cases like these, or are you denying the basic fact that Obamacare prevents them?
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** I strongly Object to "Most people who are opposed to Obamacare are sitting pretty when it comes to their own circumstances . They just don't give a shit about anyone else." My wife and I are not sitting pretty...We both have heart issues...I've had three medical procedures in the last year...She had a heart attack back in February...She still has a very serious blockage but the docs do not consider her a prime candidate for further surgery... But neither one of us consider Obamacare perfection on a stick..
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** I do not believe Your mother would have had a death sentence had some of the alternatives offered to Obamacare been in place instead of that travesty... To act as though Obamacare is the perfect solution and the only possible way is just plain wrong...
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*Name one of the alternatives offered, and how it would have solved the issue of "medical condition forced retirement, retirement voided health coverage, medical condition now pre-existing and not covered by a new plan." Now explain how it would have passed congress.
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Are you out of your mind? You tell PYCB and myself we have blinders on with the rodeo clown matter and then take your little bat and go home... then expect this from me? As if the prospects are any greater for you especially with your mom being involved?



Forget it...






*Secondarily: did you pay for those medical procedures out-of-pocket, or were they subsidized by insurance? The problem isn't when none of the options are good, the problem is when there are no options whatsoever. And for a lot of Americans, there were previously no options. As others have said, a plan doesn't have to be perfect to be an essential improvement.

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