Corbett, other AGs may sue over Medicaid exemption granted to Nebraska

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At least nine Republican attorneys general, including Pennsylvania Attorney General Tom Corbett, are questioning the legality of a compromise on Nebraska’s Medicaid payments that enabled the U.S. Senate’s health care reform bill to win approval.

South Carolina Attorney General Henry McMaster, a Republican, said he was leading an effort among Republican attorneys general to determine if an exemption granted by Senate Democrats to win the support of Nebraska Sen. Ben Nelson, a Democrat, is constitutional.

Corbett, a Republican candidate for governor in Pennsylvania in 2010, said his staff is exploring the constitutionality of the  provision, granting Nebraska a permanent exemption from paying Medicaid expenses that all other states must pay. The Senate passed its health care reform bill, 60-39, along party lines Dec. 24.

McMaster said he received a letter from South Carolina’s two Republican senators, Lindsey Graham and Jim DeMint, asking him to investigate the legality of an exemption obtained by Nelson.

“In my judgment, Democrats and Republicans alike from every state in the union should be outraged by this deal, McMaster said in a statement. “Medicaid is a joint federal-state program but in this instance one state — Nebraska — will be able to shift its future funding obligations back onto the federal government. Neither South Carolina, Georgia, California, nor any other state will have that luxury. Whatever the legal status may be (and we may soon find out), these negotiations — on their face — amount to a form of vote buying. Paid for by taxpayers.”

Nelson opposed the Senate’s Patient Protection Affordable Care Act until he secured the Medicaid exemption from Senate Democrats eager to assure they had the 60 votes necessary to move the bill forward without a Republican fillibuster.

“Quite obviously, this issue raises very serious concerns about equity, tax fairness as well as the constitutionality of having federal tax levies and mandates that treat one state differently from all the others,” McMaster said. “If the Nelson provision is not unprecedented, I feel comfortable in saying it is an exceptionally rare occurrence. States generally are treated in a similar manner. In this case, Nebraska will be treated in a widely divergent manner than any other state.”

As soon as Nelson’s deal became public, Republicans criticized Nelson and Democrats for “buying” passage of the controversial health care reform measure, which includes an individual insurance mandate, state insurance exchanges, and prohibitions on coverage caps and refusals for coverage for pre-existing conditions.

“The result of the Nelson amendment, which the media has dubbed ‘The Nebraska Compromise,’ could have dire financial consequences for Pennsylvania taxpayers, forcing them to help offset the cost of Nebraska’s Medicaid recipients,” Corbett said in a statement.

Pennsylvanians pay about $15 billion per year in Medicaid expenses, he said.

“The Nelson amendment raises serious constitutional questions about imposing federal costs and mandates that treat one state differently from all the others,” Corbett said. “The issue of equity and tax fairness should not be ignored, whether it is at the local, state or federal level.”

The Senate bill differs from the U.S. House of Representatives’ bill, which includes a public option, something the Senate bill removed. The two bills must be reconciled, a process Democratic leaders hope to complete by February, they say.

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