Monday, December 10, 2012

Small Business and Obamacare, The Facts

   as many of you are aware, the right-wing noise machine has made an issue of how much the ACA will have an impact on small businesses, and that employee hours will be cut back due to the increased cost to the employers. You have no doubt heard from Papa John Pizza founder and CEO John Schnatter threatening to raise his crap pizza prices by 10 – 14 cents in order to cover the added expense of Obamacare, which, as it turns out is bullshit.

   Apparently Papa forgot that this is the Internet age and that there are people out there who can actually still do math, and that is exactly what Maggie Mahar over at has done. She basically sums up what economist and others have reported on the obamacare costs to Papa.

Managed Care Matters’ Joe Paduda recently took a hard look at the numbers that led Papa John Pizza founder and CEO John Schnatter to announce that he’s going to have to hike the price of his pizzas by 10 to 14 cents to cover the added cost of complying with Obamacare’s provisions.

“Turns out that it’s only 3.4 to 4.6 cents” for an average-sized pie,” Paduda observes.  “Let’s think about that,” he continues. “Fourteen cents a pizza gets all of his employees excellent health coverage (only about a third are covered now), even though Schnatter says he’d ‘like to cover all of them.’”

Over at Forbes, Caleb Malby eyeballed Schnatter’s balance sheet and confirms Paduda’s appraisal: Obmacare does not constitute a major threat to profit margins. “Last year, Papa John’s International captured $1.218 billion in revenue,” he reports. “Operating expenses were $1.131 billion.” Schnatter claims that Obamacare will his cost his company $5-8 million annually. “If Schnatter’s math is accurate,” Malby writes, “ the new regulation translates into a .4% to .7% (yes, fractions of a percent) expense increase.”

“Using Schnatter’s figures,” he concludes, “the costs his company will incur due to Obamacare are not equal to the price increases he mentions. Those increases would more than make up for damage done to the company’s net income through increases to operational expenses.”

    So, Papa Johns, Denny’s, and The Olive Garden are not making good business decision when it comes to the workers and health insurance, they are making political decisions by vendetta. Their claims are nothing more than the usual conservative BULLSHIT.