Pizza is getting more expensive thanks to ObamaCare

Papa John's

The Obama Administration is still touting the Affordable Care Act — also known as ObamaCare — as some sort of law that will magically cut healthcare spending for both the budget and Americans. While they’re basing this “savings” off of a recent Congressional Budget Office reports weighing the impact of limited Medicaid expansion — thanks to the Supreme Court’s decision in June — and House Republican proposals to repeal the law, the reality is, as explained recently by the National Taxpayers Union, that scrapping ObamaCare would actually save taxpayers money.

There are also costs outside of the federal budget that have to be weighed. Sally Pipes, President of the Pacific Research Institute, notes that ObamaCare “will, in the long term, lead to higher costs and reduced access to insurance coverage.” That are other impacted costs, such as the mandates on businesses to comply with ObamaCare. These costs will no doubt trickle down to consumers rather than impacting a companies bottomline. For example, John Schnatter, founder of Papa Johns, explained that the healthcare law will cause his campany to raise pizza prices:

“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis,” Schnatter said.

“We’re not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare,” he said.

“If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders best interests,” Schnatter vowed.

Schnatter’s comments may be avoided because he is Mitt Romney supporter, but he’s absolutely right. This something that many politicians and consumers don’t seem to grasp. While certain taxes, policies or regulations may popular with the public and thus an easy way to score points with constituencies, the cost of compliance isn’t born by any company or shareholder. They are almost always passed off to the consumer or by cutting costs elsewhere, whether its hiring and/or investment.

This is just another example of how these supposedly great and worthwhile laws are going to impact Americans in more ways than federal budget deficits, but nearly anywhere they do business.

 
 


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