Medicaid subsidizing employers?
Ten employers in Florida, several of whom are receiving substantial tax breaks from the state, have a total of 49,100 employees enrolled in Medicaid. Florida is one of the few states that does not require employers receiving such tax breaks to provide health insurance as a requirement for the subsidy.
The subsidized companies, WalMart, Publix Super Markets, Winn-Dixie Stores, Burger King Corp. and Walgreen Co have an estimated 29,900 employees and/or family members enrolled in Medicaid.
According to the St. Petersburg Times,
"Combined, these five firms have been approved by the state for up to $10.8-million in tax credits and tax refunds for at least 3,805 jobs…The figures suggest taxpayers may be double-subsidizing low-wage employment by paying companies to create jobs and by paying for the health care of some of those companies' employees."
Florida is not the only state helping larger employers out through subsidies and tax breaks. Again, the St. Pete Times,
"A study last year by the University of California at Berkeley - disputed by Wal-Mart - concluded that California taxpayers spend $32 million a year providing health care to Wal-Mart workers and $54 million a year in other assistance such as free school lunches and food stamps."
It is interesting that companies that argue vehemently against governmental regulation and interference don't hesitate to take advantage of taxpayer largesse. While I understand their desire to build shareholder value, and these are certainly legal means to do so, it is concerning that Florida allows this "double dip".
In any event, this will likely not persist for too much longer. The problems inherent in state funding of Medicaid make it very unlikely that these subsidies will be sustainable. As reported here and in other forums, Medicaid is becoming the largest component of many state budgets; about a quarter of Florida's budget goes to this program.
Disclosure - I own Wal-Mart stock.
What does this mean for you?
If I paid taxes in Florida, I'd be pretty unhappy with this.
Thanks to Tom Barrett of Choice Medical Management for pointing out this story.