COMMENTARY States Could Follow Nebraska

Republicans call it a “sleazy deal.” Seven state Republican attorneys general are talking about suing.

It’s definitely an unequal deal.

There’s no evident reason that Nebraska, hardly one of our poorest states, ought to be spared Medicaid matching money that other states aren’t spared.

U.S. Sen. Ben Nelson of Nebraska says he’s merely protecting his state against an unfair unfunded federal mandate - that he’s just showing everyone else the way.

I rather suspect Arkansas and the other 48 states will follow suit, either by the time the health care bill emerges in January from a House-Senate conference or by the time all of this actually takes effect seven years hence.

That’s because it remains infinitely easier to spend from the federal government’s bottomless pit of borrowed money than from the 50 state governments’ finite resources.

Whatever additional federal costs are incurred by taking care of all 50 states starting in 2017 can always be offset in some way by tweaking the health care bill to keep the Congressional Budget Office’s 10-year projection within seemingly acceptable bounds.

Nelson is maybe even right on the merits, though it’s kind of unfortunate that we will be eroding the logical federal-state partnership by which Medicaid has always worked.

Here’s the deal:

Medicaid is health care for the poor that is paid for mostly by the federal government, but administered by the states and with matching funds provided by thestates that vary from state to state according to the poverty level thereof.

Arkansas, being one of the poorest states, has one of the lowest matches in the country.

We must ante up merely a buck for every three bucks the federal government sends, generally speaking. I’m rounding off fractions.

We tend to like it in Arkansas when Medicaid spending is increased because, while it costs us an extra buck, we get an extra three to go with it. We can help Arkansas Children’s Hospital and UAMS and struggling rural hospitals. We’ve not found any other investment that quadruples instantly like that.

One element of the health care reform bill is that Medicaid eligibility would be raised to 133 percent of the federal poverty level and made uniform from state to state. That means all states must begin providing Medicaid coverage to more people, with states being required to dip into their treasuries to find new matching money.

So it happened that Nebraska’s Nelson is the most conservative Democrat in the Senate. It happened that he was holding out on providing the 60th vote to break the filibuster and pass healthcare reform.

It happened that he was most notably opposed to including insurers in a new federal exchange that would afford abortion coverage, even abortion coverage entirely separate from any subsidies paid to citizens purchasing insurance through that exchange.

He and Senate Majority Leader Harry Reid worked out a state opt-out compromise on abortion.

Meantime, Nelson insisted on one other little thing.

Telling states to cover more people under Medicaid and do their usual match amounted to an unfunded mandate, he said. He told Reid to exempt Nebraska from that - from the Nebraska match on only the additional funding required of states for persons newly enrolled by this provision expanding Medicaid eligibility.

Reid sighed and said “Oh, OK.”

Actually, the bill requires the federal government to pay all this tab for all states until 2017. Nelson’s unique deal for Nebraska would kick in only at that time.

It’s not right, of course. But there’s the conference committee ahead, during which this could change, after which there will be seven years to work this out for all states. The Nebraska deal will be everybody’s by then, I’ll wager.

In the end, it won’t matter that Blanche Lincoln didn’t hold up Reid for us the way Nelson held him up for Nebraskans.

On a small part of Medicaid, we’ll have to ante up zero bucks rather than one to make four.

JOHN BRUMMETT IS A COLUMNIST FOR THE ARKANSAS NEWS BUREAU IN LITTLE ROCK.