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Refusal to expand Medicaid could cost Florida businesses

When it comes to opening up Medicaid to cover more uninsured Floridians, business groups have put forth either lukewarm endorsements or red-hot opposition.

What few are publicly raising, though, is this point: Expanding Medicaid could save some businesses a considerable amount of money.

The federal health reform law requires businesses that employ more than 50 people to provide them access to affordable health insurance, or pay a penalty. But for employees whose wages are low enough to qualify for expanded Medicaid, bosses are off the hook.

Currently, hardly any adults without children can get Medicaid in Florida. But if the state expands the program, a single person could make up to $15,415 — or up to $26,344 for a family of three — and get public health insurance. Service industries like restaurants, retailers and hotels all might benefit, both by avoiding financial penalties and by having employees who can get regular health care.

It's a case made by two recent research reports, and one widely discussed in health policy circles. But Florida companies aren't talking it up.

Some oppose the expansion because it means more government spending. Some businesses are too small even to face penalties in the first place. And at a time when retail giants like Wal-Mart are targets for activist groups, corporations may not want to step into a public relations mess.

"I think a lot of retailers and restaurants are not particularly eager to say, 'Please save me a penalty and cover my employees through Medicaid,' " said Neil Trautwein, a lobbyist and a vice president with the National Retail Federation.

Though Republican Gov. Rick Scott said he supports Medicaid expansion, powerful legislative committees did not. Sen. Joe Negron, R-Stuart, has come up with an alternative plan that would use the Medicaid money to help low-income people purchase private insurance.

Ed Shaw, the executive vice president for human resources at Caspers Co., which owns more than 55 McDonald's in Tampa Bay, said the company didn't want to weigh in on a political issue. But the fact that Medicaid expansion could save companies like his money is a no-brainer.

"Well, yeah, that's just common sense," he said.

Several other large companies, including Disney World, the dominant employer in Central Florida, did not return phone calls seeking comment on the issue. A spokesman for Darden Restaurants, which owns Red Lobster and Olive Garden, declined to comment. Darden made national headlines last year when it announced it would cut worker hours to avoid paying for health care. The Orlando-based company later backed off the idea.

Publix spokeswoman Maria Brous said the supermarket chain is "aware of the topic. However because Publix offers affordable and comprehensive coverage to our associates, we have no official position on this matter."

• • •

Starting next year, businesses with more than 50 employees must offer comprehensive, affordable insurance coverage, with premiums that are less than 9.5 percent of workers' income. And everyone is supposed to obtain insurance.

But say a company decides not to offer insurance. Then if one of its workers qualifies for a federal tax subsidy and purchases insurance on a government-run exchange, the company will be fined $2,000 for each full-time employee, minus the first 30.

If the company does offer insurance but it's too expensive, a different set of fines kicks in.

In its report last month, tax preparer Jackson Hewitt estimated that failing to expand Medicaid coverage could cost Florida employers at least $145.7 million per year in federal penalties. The report is based on income data for adults who work at companies with 50 or more employees.

The Florida Center for Fiscal and Economic Policy, a left-leaning group in Tallahassee, released a report with similar conclusions.

"Many of the businesses that anchor the state's service-based, tourist-dependent economy would be placed at a significant competitive disadvantage if Florida rejects Medicaid expansion," the Florida Center report concludes.

• • •

Two of Florida's major business groups, including the Florida Chamber of Commerce and Associated Industries of Florida, support Medicaid expansion — but only under specific conditions.

Asked if the potential savings played a role in the chamber's position, spokeswoman Edie Ousley said, "I think it's safe to say no stone was left uncovered.''

The Florida Retail Federation has not weighed in on expansion, but spokesman John Fleming said members are focused on overall costs of complying with the complicated law. He expressed skepticism at the new reports' conclusions. "It's really impossible to predict what the costs are going to be," he said.

The National Federation of Independent Businesses/Florida, which was a lead plaintiff in the lawsuit opposing the federal law and represents small companies, recently launched an ad campaign against Medicaid expansion.

Even without insurance penalties, small businesses will be hit by indirect consequences like the growing federal deficit, said executive director Bill Herrle.

He called it "offensive" to suggest his members might consider how a Medicaid expansion could help them if they grow.

"Do we have a dog in this fight?" said Herrle. "We have dogs all over the place."

Jodie Tillman can be reached at jtillman@tampabay.com or (813) 226-3374.

Refusal to expand Medicaid could cost Florida businesses 03/30/13 [Last modified: Saturday, March 30, 2013 9:56pm]
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