The High Cost of Refusing to Expand Medicaid

According to a report released today by Jackson Hewitt Tax Service Inc., governors who refuse to expand their state Medicaid programs under Obamacare may cost employers a great deal of money.

via Bloomberg

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 found.

A clause in the 2010 health-care overhaul penalizes some employers when their workers aren’t able to obtain affordable medical coverage through the company. Employers can avoid those fees if their workers qualify for Medicaid as part of an expansion that as many as 22 states have rejected, according to a report today by Jackson Hewitt Tax Service Inc.

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 senior vice president for health policy at Jackson Hewitt says it’s ironic that some businesses oppose the expansion of Medicaid because refusal to do will increase their taxes, but what I find even more ironic, or perhaps tragically-stupid, is that expanding Medicaid won’t cost the state or businesses a single dime for the first several years of the program.

The federal government will cover 100 percent of the cost of expanding Medicaid until 2017. Between 2017 and 2020, the federal government will cover 95 percent of the cost. And in 2020 and beyond, the federal government will still cover 90 percent of the cost.

Providing healthcare to the uninsured, which in most cases means trips to the emergency room, is far costlier than the state picking up a measly 5 to 10 percent of the cost of expanding Medicaid.

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  • muselet

    Providing healthcare to the uninsured, which in most cases means trips to the emergency room, is far costlier than the state picking up a measly 5 to 10 percent of the cost of expanding Medicaid.

    Yes, but that additional cost isn’t paid through taxes. That is what’s important, not the fact that it’s paid through higher insurance premiums and wildly inflated hospital bills for the uninsured.

    I do wish someone on the Right knew how to do arithmetic.

    –alopecia