Saturday, February 24, 2018
Business

Decision not to expand Medicaid could cost state businesses $253 million

Associated Press

FORT LAUDERDALE — The decision by state lawmakers not to expand Medicaid could cost Florida businesses as much as $253 million a year in tax penalties, according to a report released this week.

Companies with 50 or more employees face Internal Revenue Service penalties if workers get subsidized health insurance through the new exchange under the Affordable Care Act. But they don't face a tax penalty if workers get subsidized coverage through Medicaid.

A report by Jackson Hewitt Tax Service estimates 214,000 Floridians ages 18 to 64 are uninsured, working full time and earn between the poverty line and 138 percent of poverty. Of those, about 84,000 work full time for large companies offering health coverage, but workers likely can't afford it and could seek coverage and get tax credits in the exchange.

That could cost Florida businesses $169 million to $253 million a year, assuming a $2,000 to $3,000 penalty for each employee who gets a subsidy in the exchange, according to the report.

If Florida lawmakers agreed to expand Medicaid, employers would not face a tax penalty because the workers would qualify for Medicaid. Its expansion would cover low-income people making up to 138 percent of the federal poverty level, about $15,860 for an individual.

"As some states are still evaluating their participation, it is critical that any projections of the 'net' costs of Medicaid expansions also reflect the very real costs of the shared responsibility penalties to employers in any particular state," said Brian Haile, senior vice president at Jackson Hewitt.

Democrats and health advocates have been trying to build momentum on Medicaid expansion, but it may be a stalled issue even before the 2014 Legislative session begins in a few months. Sen. Rene Garcia, R-Hialeah, filed a Medicaid expansion bill Tuesday similar to a bill that passed the state Senate last year but ultimately died in the House.

"As one of the nation's largest economies, it would be irresponsible to leave money that can benefit thousands of Floridians on the table," Garcia said. "This bill would provide a vital economic impact through increased coverage in Medicaid statewide and potential job growth."

The Obama administration has promised states it will pay for 100 percent of the expanded program the first three years and 90 percent after that. Officials estimate more than 1 million Floridians would be eligible for coverage under expanded Medicaid. Florida's current Medicaid eligibility cutoffs are among the stingiest in the country and do not include coverage options for childless adults.

Senate leaders crafted a compromise that would draw down more than $50 billion in federal funds and give it to residents so they could buy private insurance. But the House did not want to take any funds tied to the Affordable Care Act.

Republican House Speaker Will Weatherford was the driving force behind the decision. And in a recent editorial, he revealed he hasn't changed his mind.

Weatherford told the Florida Times-Union last month that Medicaid is a flawed system that doesn't help the poor and echoed concerns from fellow conservatives that the federal government would not keep its promise to foot the bill.

"The Florida House stood for providing a common-sense, quality solution to address our health care challenges," Weatherford wrote.

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