Refusal to Expand Medicaid May Cost Employers $1 Billion

Governors who refuse to expand their Medicaid programs for the poor may cost employers in their states as much as $1.3 billion in federal fines, a study by Jackson Hewitt found. Without Medicaid, a “shared responsibility” payment of as much as $3,000 may be triggered for each employee who can’t get insurance through their company. In Texas, the largest state to refuse to increase Medicaid, employers may be liable for as much as $448 million in fines, the study found. In Florida, where the legislature has refused an expansion supported by Governor Rick Scott, employers may pay as much as $219 million. The report contains estimates for each state, including its status regarding whether it plans to expand Medicaid.

With as many as 22 states potentially opting out of Medicaid expansion, more workers will have to rely on the other core provision of the law, subsidized insurance sold through health exchanges. That would trigger the shared responsibility payment for each employee who can’t get insured through their company and in turn qualifies for a tax credit on the exchanges. Employers would not have to pay the penalties if their workers enroll in Medicaid. The expansion increases the eligibility to those earning up to 138% of the federal poverty level; family of four making about $32,500 this year would be eligible for the program.