Walmart Hikes Employee Healthcare Costs as Papa John’s Math Challenged


Barack Obama’s Affordable Care Act no longer faces any obstacles to becoming the law of the land, now that last week’s elections solidified Democrats’ hold on the U.S. Senate. But private companies will continue to react to the realities of health-care costs in the interests of their own businesses, to the extent they can and for as long as they can.

Take Walmart: Just after the elections, the nation’s largest retailer has announced hikes in the cost of workers’ health-care coverage of 8 percent to 36 percent because of the rising prices of medical services and health insurance. And some of Walmart’s 1.4 million U.S. employees already have reacted by considering dropping their own coverage, according to CNBC.

The cost of Walmart’s most popular health-insurance plan, for example, will go up by $2 per paycheck, or 13 percent. Still, overall, Walmart said that average costs its employees will bear for the coverage should only rise by about 4 percent in 2013 because the company has eliminated some high-premium plans and trimmed some services.[more]

“I really can’t even afford it now, so for it to go up even a dollar for me is a stretch,” said Colby Harris, who told CNBC he makes $8.90 an hour and takes home less than $20,000 a year at Walmart’s produce department in Lancaster, Texas. The 22-year-old smoker was set to see his cost per paycheck rise to $29.60 from $25.40.

More than half of Walmart’s U.S. employees sign up for its health-care plans, which cover 1.1 million people including dependents. Critics fought a long time to get the chain to extend medical coverage this broadly, just as Walmart’s many foes on the left have fought the company on many other fronts over treatment of its workers, competitors and the environment through the last quarter-century.

Walmart won’t be alone in making big adjustments, as the perceived impact of so-called Obamacare is causing employers such as Applebee’s and Papa John’s to use the legislation as the reason for cost-cutting. Papa John himself, John Schnatter, is being challenged on his math by Forbes, which estimates that “to cover the cost of Obamacare, the pizza chain would have to raise prices by 3.4 to 4.6 cents per pie — way less than the 11 to 14 cents Schnatter claims he needs.”