Obamacare: Driving Up Costs And Driving Down Those Insured
Religion & Liberty Online

Obamacare: Driving Up Costs And Driving Down Those Insured

Delta Airlines has announced that it foresees a spike in health care costs for the company to the tune of $100 million a year. A Delta executive, Robert Kight, has said that fees associated with Obamacare will be costly, but won’t likely be more beneficial than what the company’s employees now have.

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.

Further, the individual mandate — or the requirement on individuals to obtain health insurance — is expected to drive more people into the company plan and drive up their costs by another $14 million.

This comes just after the announcement from UPS and the University of Virginia that they are both dropping spousal insurance for their employees due to the cost of Obamacare. UPS told its employees:

Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer — just as U.P.S. has a responsibility to offer coverage to you, our employee.”

“In an effort to maintain premiums at or below current cost,” Andrew McGowan, a U.P.S. spokesman, said, “U.P.S. made a change that affects a limited number of employees.”

This plan affects about one-quarter of the UPS workforce in the U.S.

While the University of Virginia has been a supporter of Obamacare, the $7 million per year spousal support was expected to add to their budget proved to be too much of a burden for the school.

Along with cuts to family insurance plans, Obamacare is forcing many businesses to cut employee hours, especially in the food service industry. The Economist says that Obamacare isn’t a healthy plan for our nation at all:

…Casey Mulligan of the University of Chicago contends that Obamacare’s distortions to the labour market will outweigh any growth from lowering health costs…Mr Mulligan predicts that Americans will work 3% less in 2015 than they otherwise would have.

Interestingly, the number of jobs in sectors most affected by Obamacare, such as retail, leisure and hospitality, have grown relatively quickly, notes Alec Phillips of Goldman Sachs. But the hours worked in such industries have grown more slowly, suggesting a reluctance to add more full-time jobs.

When the final diagnosis is done, Obamacare may have nasty side-effects.


Elise Hilton

Communications Specialist at Acton Institute. M.A. in World Religions.