Delta vs. ObamaCare

Friendly skies, unfriendly rules


Delta Airlines says that ObamaCare will cost the company $38 million directly over the next year, and nearly $100 million when all additional costs are factored in.

A June letter signed by Robert Knight, Delta's senior vice president for government affairs, said that the company will absorb some of those costs but will also end up sharing some of them with employees. Ultimately, Knight wrote, ObamaCare "will result in increasing costs, for both companies and our employees, and will also reduce the benefits provided."

The bulk of the letter, which was obtained and published by Erick Erickson at RedState.com, details the specific provisions that Delta expects to add to the company's costs. Those include: a "reinsurance fee" of $63 per covered individual, which makes family coverage more expensive, and which the company estimates will cost about $10 million next year; coverage for children and dependents up to age 26, which results in a "permanent increase in costs of about $14 million a year"; and the individual mandate, which Delta expects will result in some employees who currently turn down employer coverage deciding to take it rather than pay a penalty, which the airline expects to cost an additional $14 million annually.

The letter also warns that the law's "Cadillac tax" on expensive health plans, which is set to take effect in 2017, essentially represents a ceiling on plan benefits, and that it will cause employers and insurers to pare back the benefits they offer.