We’ve all been reporting on how health care providers – particularly safety nets and public hospitals – are going to be pushing their states to go ahead with the Medicaid expansion under the health law. But there’s a whole other constituency that I hadn’t even thought of until a source pointed it out to me: business. Particularly groups that represent businesses with many low-wage workers, like retailers or restaurants.
Sound counterintuitive? These are the same groups that are pushing for repeal or at least watering down of the Affordable Care Act. Why are they going to want Medicaid expansion?
Employers with fewer than 50 employees aren’t obligated to cover their workers in 2014. Some of those who do may qualify for tax subsidies. But employers with 50 or more employees do have to cover them – and the coverage must be affordable to the worker. Otherwise the business faces penalties. (Here’s a summary of how the law affects employers from the National Association of Insurance Commissioners.)
But if the worker qualifies for Medicaid – or expanded Medicaid which means an income up to about $14,800 right now, probably more by 2014 – there is no penalty to the worker. So with expansion, a worker making just under $15,000 (133 percent of federal poverty rate) gets Medicaid. Without expansion, that same worker with the same income is on the employer’s tab.
And the tab per worker gets a little larger for each employee too. To keep premiums affordable for a worker at 100 percent of poverty ($11,170 now, maybe a bit more by 2014), the business has to absorb a little more of the cost for each worker, each month, than for someone making 133 percent of federal poverty rate ($14,856). It can add up.
A second argument that businesses may make is that the Medicaid funds are an economic stimulus (not all conservative health policy experts agree with this). Money is coming in from Washington, and much of it will stay in the state. This may be one reason why some “red” or “purple” state governors have been saying they are “studying” Medicaid expansion, rather than outright rejecting it like Texas and Florida.
Joanne Kenen (@JoanneKenen) is AHCJ’s health reform topic leader. If you have questions or suggestions for future resources, please send them to joanne@healthjournalism.org.So, are groups like the National Retail Federation and the National Restaurant Association all descending on state lawmakers en masse to get them to pursue expansion? Not yet, not forcefully or visibly. Their position is still “repeal.” And that’s what they are likely to say until the election. But if President Obama is re-elected, pay attention. The positions might shift – and for those of you with good contacts in the business community or the state legislature, start asking around now. The shift may have quietly begun.
