Obamacare dares states not to expand Medicaid

Local lawmakers have the right to refuse -- but businesses, poor residents and political careers may suffer as a result.

By Jason Notte Apr 23, 2013 7:18AM

nsurance Money (copyright Comstock Images/Jupiterimages)States and their lawmakers have the absolute right to reject the new health care law's expansion of Medicaid benefits and sniff at it derisively as "Obamacare." 


However, they should also be aware that it will burden state businesses with Internal Revenue Service penalties and deny coverage to low-income citizens while legal immigrants get aid for their own coverage.


So far, 20 states, plus the District of Columbia, have accepted the expansion. Thirteen GOP-led states have declined, citing current Medicaid expenses and distrust of Washington. An additional 17 states are still weighing options and considering how more aid to low-income adults with no children at home will affect them.


In Arkansas, the Republican-controlled legislature and Democratic Gov. Mike Beebe just struck a compromise in which the state will accept additional Medicaid money under the federal law but will use it to buy private insurance for eligible residents. The Obama administration hasn't weighed in on the move yet, but it's been deemed necessary if the state wants to avoid tax penalties for businesses and other politically uncomfortable scenarios.


Roughly half the nearly 30 million uninsured people who will get coverage as a part of President Obama's health care overhaul will do so through Medicaid, which has an income cutoff of roughly $15,860 per person. Middle-class Americans who don't have coverage at their jobs will be able to purchase private insurance in new state markets, helped by new federal tax credits.


However, states that don't expand Medicaid are putting their employers with 50 or more workers in a tough position. Those businesses face penalties if any of their employees have to get subsidized insurance through those new state markets, but not if those same workers are on Medicaid. Without the expanded Medicaid option, tax firm Jackson Hewitt says employers could be on the hook for more than $1 billion a year in penalties.


There's also the not-so-slight detail that U.S. citizens with incomes below the poverty level -- $11,490 for an individual, $23,550 for a family of four -- can get coverage only through the Medicaid expansion. Legal immigrants who are also below the poverty level, however, are eligible for subsidized private insurance.


That's a potential mess in waiting for lawmakers in immigrant-rich states like Texas and Florida, where declining Medicaid expansion could be construed as favoring immigrants over lifelong residents. That possibility has prompted outspoken Obama administration critic and Republican Arizona Gov. Jan Brewer to propose that her state expand its Medicaid offerings.


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Apr 23, 2013 8:51AM
No jobs, a terrible foreign policy, a terrible health care policy, a terrible economic policy, a terrible education policy, a terrible security policy, a terrible immigration policy, no transparency in the White House, a Congress that's stalled.  But a pretty good Socialist agenda, and our President has taken some really nice vacations. 
Apr 23, 2013 12:07PM
How about this. All people get the same healthcare as congressmen. 
How about we reform patent laws so we don't pay $50-$100 for a pill that cost pennies to make?
How about we reform Medicare to prevent fraud by doctors and hospitals?
How about we give preventative care instead of reactive care?
Apr 23, 2013 9:09AM
Any chance of impeacing this president?
Apr 23, 2013 8:47AM
They all would be smart to reject this.  Medicaid will crush their budgets in the future.  30 million new Medicaid patients.   All the high risk, high cost.  

Show me a state where Medicaid isn't the largest budget item in their budgets now.   Obamacasre will crush the middle class.  This democrat "Train Wreck" will be entirely their fault.   Hold them accountable and vote them out!
Apr 23, 2013 9:46AM

 "Legal immigrants who are also below the poverty level, however, are eligible for subsidized private insurance. "


This bill was obviously written by democrats. Our tax dollars at work.

Apr 23, 2013 11:34AM
Hey; penalties for disobeying the king?  This Obamacare is worse than we think. The cost estimate has gone up 300% since the first claim before it has even been forced on the public. This is only another law full of regulations in benefit for 10% of our population. Obama is surely not "the president of all the people: as he claimed. He has to be stopped before we have sharia law. He is not good for the USA.
Apr 23, 2013 12:29PM

Can't voters and citizens demand our Senators and Representatives health care benefits (and they have incredible plans for themselves and their families) be STOPPED completely UNTIL the mess has been cleaned up for everyone else.  Seems they should be the ones to suffer before their constituants.  Something stinks about that.

Apr 23, 2013 9:21AM
Once everyone gets the full wrath of Odumbocare people will finally get pissed at the gooberment and say hell no this was no what we wanted.  This all will have to happen before you get people mad enough that even the gooberment cant spin it anymore.  Wait until they're really paying thru the nose.
Apr 23, 2013 10:02AM

Well, this is just another socialist agenda media article. This healthcare reform bill is just a mess that in my option is going to unravel starting in Oct. For the business in the States that don’t participate in expanded Medicaid, how can the Federal Government tax for services that are not an option? How can I be penalized for something I can’t get? This is a BAD BILL that was not thought through very well. If Obama wants to tear this country apart, he is doing it at the State level. States have rights under the 10th Amendments and they are starting to openly fight for them. This is only going to get worse. I would guess that once the Federal government tries to tax businesses in States that don’t play along with expanded Medicaid, the lawsuits will start. I wouldn’t be surprised if the States helped and supported the Lawsuits. There are so many holes in this bill that it couldn’t hold potato chips.

Apr 23, 2013 1:02PM

How come legal immigrants get better insurance than me? I'm a natural born citizen trying to make my ends meet, I was injured and my insurance company has pushed me onto a S/S disability and get just enough to make my bills this suck ovomits sh it care and his policies cater to the immigrant askhole and why does our elected officials get to stay on their Cadilac policies and not oblamu care?


Apr 23, 2013 1:03PM
A total train wreck and the media threatens the states to sign on or else. I didn't vote for the SOB.
Apr 23, 2013 12:58PM
Not to worry, by election time in 2014, the voters will be so peeved, that all democrats are likely to be dumped and we will just repeal Obamacare.
Apr 23, 2013 9:26AM
Wonder when Odumbo brings out Michelle (Aunt Jemima) to give a cry me a river for her husbands Odumbocare? 

Apr 23, 2013 9:39AM
There's still a lot of stuff that is unsettled here.  If you have a business in a state that refuses to implement Obamacare, should you even have to pay the IRS penalties?  And theoretically, couldn't these states pay the IRS penalties on behalf the businesses that operate in their state?  Or maybe strike a deal where the company pays half the penalty and the state pays the other half.  They could even put it on a sliding scale depending on how many jobs the business creates.

If you think about it, states could use this as way to lure businesses and boost their economy.  What a great sales pitch to bring in businesses and encourage entreprenuership!  "Bring your business to XYZ state, where you don't have to worry about Obamacare and all the BS that goes along with it."

Apr 23, 2013 10:17AM

The penalties only apply if the person buys insurance through an exchange established by a state. If the state isn’t expanding Medicaid it likely isn’t establishing an exchange, so the feds will set one up in that state. Since the federal exchange is not an exchange established by a state the employer penalties do not apply.


That is the way the law is written, some bureaucrats tried to write the rules differently, but have been sued by several states, so the Supreme Court will likely decide the issue.


The feds also do not have the authority to spend money to establish exchanges in states that decline to establish them, so those states may not have exchanges running in January. If they try to spend money without authorization they will be sued and injunctions will be issued.

Apr 23, 2013 11:11AM
  If you have a business in a state that refuses to implement Obamacare, should you even have to pay the IRS penalties?---- What does that mean? Business's with less than 50 employee's are not affected by the law. Correct? The law also states that you do not have to pay more than 8% of your income for a policy. Correct? 
Apr 23, 2013 1:49PM
Ask yourself this one question>  When has the federal government ever run a successful business?  Everything they have ever touched has turned to ****
Apr 23, 2013 1:35PM
Interesting, obama favors immigrants over existing U.S. citizens. So much for having the interests of America's poor at hand. Based on obamas history is it any wonder that many states no longer trust the federal government to keep its promises?

The federal government is TOO BIG.  They stick their noses in places where they have no business. They have expanded their powers far beyond the founding fathers deemed their power. 

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