Medicaid opt-out exposes hospitals, businesses to financial strain

Low-income patients in states refusing to expand Medicaid coverage are almost certain to remain uninsured, forcing them to seek care in emergency departments at hospitals already stretched by lower federal reimbursements, the Associated Press reports.

Medicaid expansion was expected to cover about half of the nearly 30 million people who would gain insurance under the Affordable Care Act. But 13 states with Republican governors have declined to expand Medicaid, an option opened up by the Supreme Court ruling otherwise upholding healthcare reform. Another 17 states are on the fence, according to the AP.

It's only one of what the AP calls unexpected consequences of declining the largely federally funded Medicaid expansion. Another major complication: Businesses that fail to offer health insurance could be subject to more than $1 billion in federal tax penalties, according to an analysis by Jackson Hewitt Tax Service Inc.

Employees can seek health insurance through the new health insurance exchanges, but companies with more than 50 employees will face tax penalties if even one worker gets subsidized insurance through the exchange, AP reported.

Lawmakers in Arkansas think they can avoid those business penalties by using federal Medicaid expansion funds to buy private insurance for eligible residents.

"The biggest lesson out of Arkansas … is just a message of creativity, that they can look at it and say, 'How can we do this in a way that works for us?'" Alan Weil, executive director of the nonpartisan National Academy for State Health Policy, told the Associated Press.

Meanwhile, in Florida, a bloc of moderate House Republicans hold the key to whether lawmakers will support Medicaid expansion and accept the $51 billion in federal money that comes with it, the Tampa Bay Times reported. The 44 House Democrats need 16 Republicans to join their vote to expand Medicaid.

The GOP lawmakers are facing an intense lobbying effort, including a television advertising campaign, the newspaper reported.

A similar bill in the Florida Senate already has bipartisan support, according to the Times.

To learn more:
- read the AP article (via NPR)
- here's the Jackson Hewitt report (.pdf)
- check out the Tampa Bay Times article