Nelson Asks Reid to Drop Medicaid Break for Nebraska

Posted January 15, 2010 at 1:09pm

Sen. Ben Nelson (D-Neb.) on Friday asked that a deal he secured for his state on Medicaid funding be removed from the health care reform bill, a move that follows weeks of unrelenting political blowback.

Nelson contends that a $100 million deal he extracted for Nebraska in December to pay the state’s cost of a proposed Medicaid expansion was misunderstood. He said it was intended to act as a placeholder to ensure that all states received similar treatment once negotiations to reconcile the House and Senate bills commenced.

But after weeks of criticism from Nebraskans and fellow Democratic Senators and a backlash that extended nationwide for a deal that came to be known as the “Cornhusker Kickback,— Nelson on Friday sent a letter to Majority Leader Harry Reid (D-Nev.) asking him to strip the provision from the reform bill.

In his letter, Nelson asks that the Nebraska-only measure be replaced with one that would exempt all states from paying the cost of a proposed Medicaid expansion. However, his letter appears to make clear that regardless of whether that request is granted, he wants the provision affecting Nebraska removed.

Medicaid, a program that provides health coverage to the poor, is jointly funded by the federal government and the states.

Nelson’s letter reads as follows:

“As a former Governor, I have long fought against unfunded federal mandates, which force our state governments to redirect their priorities and funding to meet rules imposed by Washington, D.C. In evaluating the Patient Protection and Affordable Care Act, H.R. 3590, I was concerned that the Medicaid expansion in the bill represented an unfunded federal mandate since state governments would have to pay for new Medicaid enrollees after 2017.

“After raising the issue of the unfunded mandate during Senate negotiations, a provision was added to exempt the State of Nebraska from paying any additional Medicaid funds as a result of the bill. This was intended to serve as a placeholder that would be removed during the conference negotiations and replaced with a mechanism applying to all state governments.

“I request that this specific exemption for the State of Nebraska be removed, and that it instead be replaced with a provision giving all state governments the same treatment regarding the state match for the new Medicaid expansion.

“I believe I have been clear that my intentions during all stages of negotiations were not that the State of Nebraska be given a special deal, but rather that all states be given the same tools to address an unfunded federal mandate. To remove any attempts at continued distortion or miscommunication on this point, however, I ask that the Nebraska Medicaid exemption be removed and that all states receive equal treatment under the Medicaid expansion.

“Thank you for your consideration. I look forward to working with you on this matter as you continue to craft the final health care reform legislation.—