Could A Huge Penalty On Tennessee Businesses Nudge Medicaid Expansion?

Under the Affordable Care Act, companies with upwards of 50 workers face “shared responsibility” penalties for workers who would be eligible under a Medicaid expansion, but can’t sign up in their state, and take a tax credit instead. (Credit Lynn Kelley Author / flickr)

Some big companies in Tennessee could be out upwards of $50 million combined next year, because so far the state hasn’t expanded Medicaid as part of the Affordable Care Act.

That’s according to a new report out Wednesday, which some say just puts more pressure on Governor Bill Haslam to spell out details of a so-called “Tennessee Plan.”

For each worker who would be covered under a Medicaid expansion, but isn’t, the report says larger employers could face a penalty of $2000 or more. Some business organizations, like the Tennessee Chamber of Commerce, say it adds to the case for Medicaid expansion.

But the business community is split, says Jim Brown, with the National Federation of Independent Business, which fought the ACA. Brown notes many of the companies NFIB represents are small, and the penalties won’t affect them.  When polled, most oppose expanding Medicaid, Brown says, fearing what it’ll do to the state’s tax burden long-term.

“Just realistically, knowing our membership, there are folks who are going to be opposed no matter what.  But there are others that are watching to see.”

Brown says if Governor Haslam releases details of a possible compromise with federal officials, then NFIB would do a new poll and give it a fresh look.