From $898 A Month Down To Just … $22? October 22, 2013October 21, 2013 BOREF WheelTug signed its 13th airline — Mexico’s second largest, Volaris — which adds 90 aircraft to the reservation list, now 731 planes long. My assumption continues to be that no airline in its right mind would not want the savings from WheelTug — like wanting a TV without a remote control or a refrigerator that builds frost — so that if this all works out (which for reasons unbeknownst to me it may not!), there will eventually be more like ten or twenty thousand planes using it. The company projects annual savings per plane in the $1 million range, of which it proposes to grab half. I continue to think it will never get remotely that large a chunk of the savings, if only because much of the savings — though real — will be so hard to quantify. Still, if WheelTug could bring $50,000 per plane per year to the bottom line, that would be $36 million annual profit on just these 731 planes, or $500 million a year on 10,000 of them. So with stock in WheelTug’s grandparent closing up another $2 yesterday at $19.80 (having touched $21.50 as it bounced around on what — for it — was record volume), you have it valued at a hair under $100 million . . . less than half that beautiful Cezanne and not much at all, really, if its subsidiary ever does earn $37 million or $500 million a year. Big IFs — which is why, as always, you must only buy shares with money you can truly afford to lose. A CORRECTION BUT NOT A TYPO I screwed up last week when I wrote that the $95 fine for those who are uninsured and choose not to buy healthcare coverage “might” have to go up if not enough young healthy people sign up. In fact, definitely goes up. I knew that, but somehow forgot. But, even so, I wrote — and this is the part I got right — so what? We already make tens of millions of young healthy people pay the same as againg diabetics for their group health insurance at work. We make vegetarians pay for meat inspectors. We make Iraq War opponents pay for the Iraq War. It’s called living in a large, complex society. Thanks to Jim S. for remind me that “the penalties are already scheduled to increase:” When someone without health coverage gets urgent—often expensive—medical care but doesn’t pay the bill, everyone else ends up paying the price. That’s why the health care law requires all people who can afford it to take responsibility for their own health insurance by getting coverage or paying a penalty. The fee in 2014 is 1% of your yearly income or $95 per person for the year, whichever is higher. The fee increases every year [until] 2016 [when] it is 2.5% of income or $695 per person, whichever is higher. For more on this, click here. Jim S. continued: “My own health insurance costs next year will go down from $898 per month for a high-deductible plan with Kaiser to $22 per month for a similar plan with Kaiser under the Affordable Care Act which I purchased through the California health exchange last week.” Come again? I assumed $22 was a typo, but when I asked, Jim replied: “It was not a typo. I actually feel a little bit guilty because this is such a great deal. I am 63 and my wife is 62. Our income consists of social security and a small pension. I have been gradually converting our IRAs to Roth IRAs over the years so I supplement our income with distributions from our Roth IRAs. These Roth distributions are not included in our modified adjusted gross income which is the key number in the ACA subsidy calculation. Since our modified adjusted gross income is low (about $47,000 in 2014), we qualified for a subsidy of $1046 per month. Based on that, our share of the $1068 premium for our policy is $22. The policy is called the Kaiser Permanente Bronze 60 HSA. It has a high deductible but allows you to contribute to a Health Savings Account. My $898 plan was a similar HSA-compatible plan.” Despite the lamentable roll-out problems of healthcare.gov — no one’s finest hour — the overall long-term impact on the health of the citizenry — and the economy — should be highly positive. Ideally, the national resolve will be to improve the system as we encounter problems, not try to tear it down. In some quarters, that may be too much to hope for. But with time, comparisons of Obamacare to slavery . . . and the well-meaning but ill-informed demands that government “keep its hands off Medicare” . . . may just sort of fade away, as did Ronald Reagan’s now famous jeremiad against Social Security and Medicare.