“Cornhusker Kickback” not only dubious deal Nebraska’s Nelson got for his healthcare vote

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The “Cornhusker Kickback” exempted Nebraska from the costs of expanding Medicaid, the federal healthcare program for the poor. That exemption, which takes effect in 2016, reportedly would save the Great Plains state as much as $100 million over the first ten years. Presumably the other 49 states — none of them exempted — would pay more to help fund Nebraska’s share of the expansion. Nelson’s second deal — scantly noted by the media — wasn’t quite so altruistic, but it was just as unfair. As part of his eleventh-hour agreement with Senate Majority Leader Harry Reid of Nevada, Nelson exempted Blue Shield and Blue Cross of Nebraska from millions of dollars of a $70-billion health insurance premium tax that begins in 2011. Obviously that’s a good move for the Omaha-based health insurer and the more than 200,000 Nebraskans who have group or individual policies with it. For the 181,000 Nebraskans who have group or individual health plans with more than a dozen non-Blue insurers, however, it almost surely will mean they’ll eventually pay the premium insurance tax when they pay their health insurance bills. Indeed, the respected Congressional Budget Office has said on several occasions that the health insurance premium tax, while initially paid by the health insurers, will quickly show up in the premium bills of Nebraskans who purchase health coverage. That would surely qualify as prima facie evidence of discrimination if a similar such case ever came before the Equal Employment Opportunity Commission. The irony of Nelson’s second deal with Reid is that it actually discourages competition, restricts choices and raises costs — outcomes diametrically opposed to the goals of Democratic moderates when healthcare reform was first unveiled a year ago. In fact, because of Nelson’s bow to Blue Cross and Blue Shield of Nebraska almost as many Nebraskans will see increased premiums as those who will be sheltered from the hike because they are Big Blue customers. Consider the effects of Nelson’s deal on group coverage and individual market insurers in Nebraska:

Last year, 171,000 Nebraskans purchased group health coverage from one of 16 non-Blue insurers offering plans to Nebraskans. Soon their increased premiums will help subsidize the discounts of 194,000 Nebraskans — mainly employees of small business and their families — enrolled in group coverage offered by the exempted Blue Cross and Blue Shield of Nebraska.
• Among Nebraskans who purchased individual plans last year, some 10,000 got coverage from one of 15 insurers who will be subject to the health insurance premium taxes that begin in 2011 — taxes that Big Blue won’t have to pay on its nearly 40,000 individual plans next year.

Nelson’s “Cornhusker Kickback” shenanigans caused his favorability ratings in Nebraska to plummet to 32 percent in some polls — even though he essentially is bringing some Washington pork home for local consumption. That reaction is hardly surprising since Nebraskans have a national reputation as fiercely independent people who would rather earn their way than accept handouts unfairly extracted from others. It will be interesting to see how disclosure of his second deal — one that pits Nebraskans against Nebraska — plays out. Although the McCook lawyer is not up for reelection until 2012, he already is running scared and buying statewide ads to defend his self against charges of vote-selling. Aides say he is counting on time healing all wounds, but some political scientists in Washington say the sum of both deals he concocted with the unpopular Harry Reid may make this more the case of time wounding all heels, as Groucho Marx once quipped. Be that as it may, Nelson has become somewhat repentant about his enabling vote, recently telling the Fremont (NE) Tribune that “I think it was a mistake to take health care on as opposed to continuing to spend the time on the economy.” In the meantime, all Nebraskans, including Nelson, can savor the fact that their beloved Big Red — the University of Nebraska football team — has returned to prominence and appears ready to contend for a national championship. Whether they see “red” when they go to the polls two years from now remains to be seen, but there’s no doubt that Ben Nelson is running scared for his political life. Kerri Houston Toloczko is Senior Analyst for the Alliance for American Manufacturing ([url=http://www.american]http://www.american[/url] manufacturing.org), a Washington partnership of business and labor devoted to restoring the nation’s steel manufacturing capability. Readers may write her at AAM, 727 Fifteenth Street NW, Suite 700, Washington, DC Washington, DC 20005.

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