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In Defense of the Cornhusker Kickback

Providing health care to the poor should not be a cause for scandal

By Dylan R. Matthews

Like most left-of-center people, I strongly support the health care bill that passed the House Sunday afternoon. The concrete benefits are familiar, but always worth repeating. According to Congressional Budget Office estimates, it would reduce the ranks of the uninsured by 32 million by 2019, ultimately ensuring that 95 percent of non-elderly legal residents of the U.S. will have coverage. In doing so, it will make a large dent in the 45,000 yearly deaths attributable to a lack of health insurance. It will ban clearly unjust practices, such as denying coverage based on a pre-existing illness or disability, and reduce premiums for many working class families.

Just as critically, this bill will finally establish the provision of basic health services as the responsibility of the federal government. Before this bill, America was a country where the government could disclaim responsibility when its citizens suffered and died early due to diseases beyond their control. Now, such cruel neglect is not an option.

There have been some fair criticisms of the bill from both sides. Liberal critics are right to condemn the bill’s restrictions on funding for insurance plans that cover abortion, which could function as an effective ban on the procedure for poor women. Conservatives and centrists are right to condemn the bill’s cost control measures, which do not go far enough in moving to a system where doctors are compensated for quality of outcomes, not quantity of procedures. These are both areas of reform that can, and should, be pursued in future revisions to the bill.

However, one criticism of the bill, or more precisely of the original Senate bill that it amends, cannot go unchallenged. First, a bit of history: To win the support of Senator Ben Nelson, a conservative Democrat from Nebraska, Senate Majority Leader Harry Reid inserted a provision into the Senate health bill providing funds to the state government of Nebraska. One of the main ways the health care bill expands coverage is by increasing access to Medicaid, which is funded with a combination of federal and state dollars. Under Reid and Nelson’s deal, this expansion would be fully funded for by the federal government for a number of years, but only in Nebraska.

The public outcry was as swift as it was vicious. Republicans decried the bill as the “Cornhusker Kickback,” with Senate Minority Leader Mitch McConnell calling it a “kind of smelly proposition.” Twelve Republican state attorneys general speciously claimed the deal was unconstitutional, as though the Supreme Court would ever strike it down. Even Republican Nebraska Governor Dave Heineman and the vast majority of Nebraskans rejected the proposal as unfair.

Certainly, the deal is unfair, but its critics made the deal seem like some kind of dastardly act of corruption—as its epithet says, a “kickback.” But Ben Nelson did not stand to benefit from the deal. He has health care, and quite good health care at that. The ones benefiting were the poor citizens of Nebraska, whose health care would not be at the whims of a miserly, budget-balancing state government for the next decade. Medicaid expansion is an enormously effective way of extending access to health care. MIT economist Jonathan Gruber, the most knowledgeable expert on American health care financing, estimates that Medicaid is far more efficient than either individual or employer health care tax credits, providing a dollar in insurance for every $1.17 the government spends.

But Medicaid is also a perpetual whipping boy of state legislatures and governors, who, with the exception of Vermont’s, are required to balance their budgets. Medicaid is often the first program cut, because gutting it does politicians little harm—after all, the poor have little means by which to fight back. Just look at what has happened in Arizona, where Governor Jan Brewer dropped 310,000 from the Medicaid rolls, and eliminated outright the state’s children’s health care program, leaving 47,000 additional children uninsured. The federal government, by contrast, can run deficits and has representatives, like Nelson, willing to fight for funding for their states’ Medicaid programs. The more the federal government is involved in Medicaid, then, the safer poor families are from the states’ morally bankrupt budgetary processes. The Cornhusker Kickback, then, was a step in the right direction.

To their credit, the Obama administration and Congressional leaders opted not to end the Nebraska provision but to make it universal. The health care bill will pay for all Medicaid expansion costs until 2020, after which it will pay for 90 percent. But this likely would not have happened without Nelson’s original deal, and his subsequent suggestion that it be expanded. More distressingly, the outrage over the deal makes for a perverse incentive, one that may discourage future efforts of Senators and Congressmen to help the poor in their states and districts. Caring for the less fortunate is a sign of humanity, not corruption, and the Nelson deal’s critics should be ashamed of suggesting otherwise.

Dylan R. Matthews '12, a Crimson editorial editor, is a social studies concentrator in Kirkland House. His column appears on alternate Wednesdays.

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