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Red States vs. Blue States on Medicaid

Though Republicans were among the first to assail Ben Nelson’s Medicaid carve-out for Nebraska, they’ve hardly been the only critics of the deal and the bill’s expansion of the entitlement program. In recent weeks, Blue State governors and other officials have piled on the Democratic leaders of the reform effort for forcing their states to pony up too much for the Medicaid expansion. Even Democratic allies who had previously been supportive of the reform effort – including Mike Bloomberg, David Paterson, and Arnold Schwezenegger – have begun airing their criticisms. While not all have gone as far as Schwezenegger in telling legislators to kill the bill if Nelson’s deal isn’t nixed and the Medicaid provisions aren’t changed, the growing discontent has grown worrisome for the Democratic leadership.

But there’s a difference between Red and Blue State opposition to the bill’s Medicaid provisions. Red State and Republican opposition has mostly focused on the constitutionality of Nelson’s carve-out, spearheaded by 13 state attorney generals (12 Republicans and one Democrat) who have threatened to sue over the provision. In contrast, many Blue States believe the Medicaid provisions are unjust for fiscal reasons, as Kate Pickert and Karen Tumulty explain:

states that expanded Medicaid coverage on their own — say, to include low-income childless adults under 65 — will get less federal aid than those that have been stingier with their Medicaid programs. Because liberal and heavily Democratic states have traditionally been more generous in their Medicaid programs, they are likely to be the ones shortchanged. The biggest beneficiaries, arguably, could be states like Texas, whose lawmakers have waged the strongest rearguard campaign against reform. That may be reform's biggest political irony of all.

State governments had been grumbling about some of these inequities long before Reid had struck his deal with Nelson. But the rather unseemly deal—one that seem to have only political motivations, without any policy justifications—has prompted both Republican and Democratic state officials to pick up their pitchforks.

The Democratic leadership seems to have recognized the need to address this flare-up within their own ranks: this afternoon, the White House was scheduled to have a conference call with Democratic governors to address their concerns about the bill. It’s unclear whether they’d actually make any changes that would favor these states, which would likely set off another round of protestation from Republican governors. But they’ll need to find some way to assure these governors and regain their support—not only for the reform effort, but for all the other political challenges the party will face this election year.