According to the analysis from Jackson Hewitt Tax Service Inc., the associated costs to employers could total anywhere from $876 million to $1.3 billion in the 22 states that are either opting out of the expansion, or are leaning that way. In Texas, for example, federal tax penalties on the state's employers would increase from $299 million to $448 million each year.
"Any projections of the 'net' costs of Medicaid expansions should reflect the very real costs of the shared responsibility penalties to employers in any particular state," the analysis said.
Brian Haile, senior vice president for Health Policy Jackson Hewitt, and the author of the study, says states and businesses must make sure they understand the consequences of forgoing Medicaid expansion funding.
"The tax code is incredibly complex but in light of the Supreme Court's decision making Medicaid expansion optional you have some unanticipated results," Haile told HealthLeaders Media. "Folks who are very concerned about taxes might in some senses favor expanding Medicaid. You usually can't say that in the same sentence but you can in some instances say that here."