FORT LAUDERDALE (CBSMiami) – The GOP-led Florida Legislature quickly rejected Medicaid expansion as part of the Affordable Care Act a few years ago, but the decision may impact a key Republican constituency, businesses.
The decision to not expand Medicaid as part of the ACA saw Florida pass up more than $50 billion in additional funding to help defray the costs of the expansion. But businesses may also lose out on up to $253 million a year in tax penalties due to that decision.
Based on the ACA, companies that have 50 or more employees will face tax penalties if workers get subsidized health insurance through the ACA. The purpose of the tax was to encourage businesses to offer employees health insurance through the workplace.
But, businesses will avoid the tax penalty if workers get subsidize coverage through Medicaid.
Jackson Hewitt Tax Service estimates that 214,000 Floridians between 18 and 64 are uninsured, working full-time, and earn between the poverty line and 138 percent of poverty. Out of those, roughly 84,000 work full-time for large companies offering health coverage, but workers can’t afford it and could seek coverage and get tax credits in the health exchanges.
Had Florida expanded Medicaid, the large companies would not face a tax penalty because those 84,000 workers would qualify for Medicaid. However, since the Legislature decided to eschew expanding the health care, those businesses in Florida may be on the hook for a tax bill between $169 million and $253 million a year.
“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, Jackson Hewitt Tax Service Inc.
State Senator Rene Garcia filed a Medicaid expansion bill Tuesday similar to the one that passed the state senate last year. The Senate bill would have taken the $50 billion in federal funds and given it to citizens that qualified for Medicaid to buy private insurance.
However, Republican House Speaker Will Weatherford killed the bill in the Florida House as Republicans didn’t want to take any money associated with the Affordable Care Act.
Multiple states led by Republicans have reevaluated expanding Medicaid and have chosen to expand the system under the ACA. Weatherford was unmoved saying it’s a flawed system and that the federal government wouldn’t pay for it as has been promised, though the only way that would happen is if the ACA was repealed.
Governor Rick Scott, who made his name fighting the passage and implementation of the ACA, changed his position on expanding Medicaid last year. Scott’s position has again shifted slightly during the election year, but expanding Medicaid isn’t a priority.
(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)