WASHINGTON (AP) — Rejecting the Medicaid expansion in thefederal health care law could have
unexpected consequences for stateswhere Republican lawmakers remain steadfastly opposed to what they scornas
"Obamacare."It could mean exposing businesses to InternalRevenue Service penalties and leaving
low-income citizens unable toafford coverage even as legal immigrants get financial aid for theirpremiums.
For the poorest people, it could virtually guarantee that theywill remain uninsured and dependent on the
emergency room at localhospitals that already face federal cutbacks.Concern about suchconsequences helped
forge a deal in Arkansas last week. TheRepublican-controlled Legislature endorsed a plan by Democratic
Gov.Mike Beebe to accept additional Medicaid money under the federal law,but to use the new dollars to buy
private insurance for eligibleresidents.One of the main arguments for the private option was that it would
help businesses avoid tax penalties.TheObama administration hasn’t signed off on the Arkansas deal, and
it’sunclear how many other states will use it as a model. But it reflects apragmatic streak in American
politics that’s still the exception in thepolarized health care debate."The biggest lesson out of
Arkansasis not so much the exact structure of what they are doing," said AlanWeil, executive director
of the nonpartisan National Academy for StateHealth Policy. "Part of it is just a message of
creativity, that theycan look at it and say, ‘How can we do this in a way that works forus?’"About half
the nearly 30 million uninsured people expectedto gain coverage under President Barack Obama’s health care
overhaulwould do so through Medicaid. Its expansion would cover low-incomepeople making up to 138 percent of
the federal poverty level, about$15,860 for an individual.Middle-class people who don’t havecoverage at
their jobs will be able to purchase private insurance in newstate markets, helped by new federal tax
credits. The big push to signup the uninsured starts this fall, and coverage takes effect Jan.
1.Asoriginally written, the Affordable Care Act required states to acceptthe Medicaid expansion as a
condition of staying in the program. Lastsummer’s Supreme Court decision gave each state the right to
decide.While that pleased many governors, it also created complications byopening the door to unintended
consequences.So far, 20 mostly blue states, plus the District of Columbia, have accepted the
expansion.ThirteenGOP-led states have declined. They say Medicaid already is too costly,and they don’t trust
Washington to keep its promise of generous fundingfor the expansion, which mainly helps low-income adults
with no childrenat home.The remaining states are still weighing options.Concerns about the unintended
consequences could make the mostdifference in those states.A look at some potential side effects:—The
Employer GlitchStatesthat don’t expand Medicaid leave more businesses exposed to taxpenalties, according to
a recent study by Brian Haile, Jackson Hewitt’ssenior vice president for tax policy. He estimates the fines
could top$1 billion a year in states refusing.Under the law, employerswith 50 or more workers that don’t
offer coverage face penalties if justone of their workers gets subsidized private insurance through the
newstate markets. But employers generally do not face fines under the lawfor workers who enroll in
Medicaid.In states that don’t expandMedicaid, some low-income workers who would otherwise have been
eligiblehave a fallback option. They can instead get subsidized privateinsurance in the law’s new markets.
But that would trigger a penalty fortheir employer."It highlights how complicated the AffordableCare
Act is," said Haile. "We wanted to make sure the business communityunderstood."—The Immigrant
QuirkArizona Gov. Jan Brewer, aRepublican, called attention this year to this politically awkwardproblem
when she proposed that her state accept the Medicaid expansion.Underthe health law, U.S. citizens below the
poverty line — $11,490 for anindividual, $23,550 for a family of four — can only get coverage throughthe
Medicaid expansion. But lawfully present immigrants who are alsobelow the poverty level are eligible for
subsidized private insurance.Congresswrote the legislation that way to avoid the controversy associated
withtrying to change previous laws that require legal immigrants to waitfive years before they can qualify
for Medicaid. Instead of draggingimmigration politics into the health care debate, lawmakers devised
adetour.Before the Supreme Court ruling, it was a legislative patch.Nowit could turn into an issue in states
with lots of immigrants, such asTexas and Florida. It could create the perception that citizens arebeing
disadvantaged versus immigrants.—The Fairness ArgumentUnderthe law, U.S. citizens below the poverty line can
only gettaxpayer-subsidized coverage by going into Medicaid. But otherlow-income people making just enough
to put them over the poverty linecan get subsidized private insurance through the new state
markets.Anindividual making $11,700 a year would be able to get a policy. Butsomeone making $300 less would
be out of luck, dependent on charity careat the emergency room."Americans have very strong feelings
aboutfairness," said Weil. "The notion of ‘Gee, that’s just not fair’ isdefinitely a factor in the
discussion."Copyright 2013 The Associated Press.