Nebraska’s Sweetheart Deal

Perhaps the weirdest concession Ben Nelson extorted from his fellow Democrats was a few bonus years of 100 percent federal funding of Medicaid . . . but only for Nebraska. The actual amount of money involved in this is small, but the policy justification is impossible to find. So it’s natural that this is attracting critics, like this from Lindsay Graham:

KING: Are you confident the Republicans can say no, make all those points you just made, and benefit politically next year, or do the Republicans need to do more?

GRAHAM: We need to offer solutions. But the Medicaid deal, for Senator Nelson — there’s one state in the union where new enrollees for Medicaid will be signed up, and it won’t cost anybody in that state money. It’s not my state. I’ve got 30 percent African-American population, a lot of low-income African-Americans on Medicaid. I don’t know what the numbers are in Nebraska, but I want my attorney general — there are a lot of people, Republicans and Democrats, are upset by this.

Someone should probably tell Senator Graham that there are white people on Medicaid. Hispanics too! Asians, even. I know conservatives don’t like it when they get called racists, so I’ll just observe the error here and not make any judgments about why a Senator would go on television and state, repeatedly, that a crucial element of the American safety net is some kind of blacks-only program.


On the real issue here, though, I think this reminds us that Nelson’s concession is totally politically unsustainable. The extra federal bucks for Nebraska aren’t scheduled to arrive until 2016. That gives congress tons of time to repeal Nebraska’s special treatment. Given Nelson’s pivotal role in the great health care debate of 2009–2010 he was in a position to demand whatever he wanted. But he can’t stay in that position consistently for the next seven years. There’s no constituency whatsoever for this special Nebraska exemption. The only real question becomes whether we’ll “level down” by having Nebraska treated the same way other states are treated by the bill, or whether we’ll “level up” by having the federal government pick up a larger share of the tab for the other 49 states.