Jackson Hewitt, a nationwide tax preparation service, concluded in a study that the federal Affordable Care Act could cost some employers in states that do not participate in the Medicaid expansion.
“The associated costs to employers could total $876 million to $1.3 billion each year in the 22 states that have opposed, are leaning against, or remain undecided about expanding Medicaid,” the Jackson Hewitt study concluded.
Mississippi is one of the 22 states opposed to the expansion. Republican Gov. Phil Bryant has been an outspoken opponent of the expansion, saying the state cannot afford the costs of paying for Medicaid for those earning up to $15,000 for an individual or $32,000 annually for a family of four.
No legislation is alive in the current session to expand Medicaid. The federal government will pay 100 percent of the expansion costs for the first three years, starting in 2014. After that, it will be stair-stepped down to 90 percent in 2020, where the federal share is supposed to remain.
Even during the first three years of expansion, Bryant said the state would face millions of dollars in administrative costs that it cannot afford. A study by the Mississippi Institutions of Higher Learning concluded that the expansion would be a net gain to the state general fund for the first three years because of the economic activity the federal money would generate. After that, the state would incur some costs, according to the IHL study.
The Jackson Hewitt study surmised that “any projections of the ‘net’ costs of Medicaid expansions should reflect the very real costs... to employers in any particular state.”
Jackson Hewitt said the costs would be between $21.7 million and $32.6 million annually for Mississippi employers. Under the federal law, companies with 50 or more full-time equivalent employees could face up to a $3,000 penalty for each employee who receives a federal tax credit to help them obtain a private health insurance policy. The federal law would mandate that the employees have some type of health insurance.
The employees, if they were under 138 percent of the federal poverty level, would be placed on the expanded Medicaid rolls instead of receiving a tax credit to purchase private health insurance. The penalty on employers would kick in only if the employee received the tax credit, not if the employee was placed on Medicaid, according to Jackson Hewitt.
The Jackson Hewitt study said there are about 10,850 employees in Mississippi working for companies that could face penalties if the state does not participate in the Medicaid expansion. The penalties would range from $2,000 to $3,000 per employee, depending on a number of variables.
Mick Bullock, a spokesman for the governor, said he was not familiar with the study.