States Rejecting Medicaid Expansion May Face Unexpected Fallout

WASHINGTON (April 22, 2013)--Republican lawmakers in many states including Texas remain steadfastly opposed to the health care law, but rejecting the law's Medicaid expansion could have some unexpected consequences.

For example, local businesses potentially could be exposed to Internal Revenue Service penalties, and poor residents might be unable to afford coverage even as legal immigrants get financial aid for their premiums.

Rejection of the expansion would virtually guarantee that the poorest people will remain uninsured and depend on the emergency room at local hospitals.

Concern about such consequences led to a Medicaid compromise in Arkansas last week.

The Republican-controlled Legislature endorsed a plan by Democratic Gov. Mike Beebe to accept additional Medicaid money under the federal law but use it to buy private insurance for eligible residents.

Other states are looking at Arkansas' approach.

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