Since the passage of the Patient Protection and Affordable Care Act and at the request of President Barack Obama's administration, many states have decided to expand their Medicaid program, enabling more people to get covered who make modest amount of income. Some, however, have decided to keep the program as it is.
But by doing this, states could be bringing significant costs for business that operate in the area, including those that provide employee benefits, according to a new report.
States that opt not to expand Medicaid may unwittingly expose their employers to more onerous taxes and penalties, tax preparation firm Jackson Hewitt noted recently.
Brian Haile, senior vice president of the Parsippany, N.J.-based financial services firm, said that the penalty could affect half of the U.S.
"In the 25 states that have opposed or remain undecided about expanding Medicaid for adults, we estimate that employers may pay an additional $1.03 billion to $1.55 billion in federal tax penalties beginning in 2015."
For instance, in Texas, the Jackson Hewitt report found that business owners there may wind up paying between $266 million and $400 million in tax penalties next year. Meanwhile, in Pennsylvania, which also decided to keep Medicaid as-is, companies there could be set back between $52 million and $77 million.
The report concluded that in states' effort to rein in Medicaid costs, they may ultimately wind up hurting business owners in the end, starting as early as 2015.
President Barack Obama announced during his State of the Union address that nine million Americans have signed up for private health insurance or Medicaid coverage, all because of the ACA. The Washington Post has noted that suggesting the law is responsible for this amount of people signing up is inaccurate at best and misleading at worst.
