Sunday, December 20, 2009

Some states are more special than others

When you peruse the list of special "gifts" in the health care bill, what stands out is not so much the individual spending on a hospital in one state. That is standard pork and we all expect that in whatever Congress does. So Bernie Sanders got $10 billion for Vermont health centers and that ameliorated his distress at the loss of the public option. That's a one-time payout and, while its number is bigger than usual for such pork, we all know that that goes on.

What amazes me is how this bill was crafted to treat some states, in perpetuity, differently from other states simply because those states had senators who were more powerful or more canny when it came to bargaining for their support. Politico has some of these details. Of course, we know about Ben Nelson's price for his vote. It is now being called the "Cornhusker kickback."
Nelson’s might be the most blatant – a deal carved out for a single state, a permanent exemption from the state share of Medicaid expansion for Nebraska, meaning federal taxpayers have to kick in an additional $45 million in the first decade.
When your state is facing budgetary woes as it tries to balance its budget and faces larger payouts for the Medicaid expansion, think of Nebraska who got the federal taxpayer to pay for their Medicaid expenses.

But Nelson wasn't the only one who got special treatment for his state.
Nelson and Sen. Carl Levin (D-Mich.) carved out an exemption for non-profit insurers in their states from a hefty excise tax. Similar insurers in the other 48 states will pay the tax.

Vermont and Massachusetts were given additional Medicaid funding, another plus for Sanders and Sen. Patrick Leahy (D-Vt.) Three states – Pennsylvania, New York and Florida – all won protections for their Medicare Advantage beneficiaries at a time when the program is facing cuts nationwide.

All of this came on top of a $300 million increase for Medicaid in Louisiana, designed to win the vote of Democratic Sen. Mary Landrieu.
Why should Michigan and Nebraska be the only states where their insurers get a tax exemption? Is there any rhyme or logic to that? And why should Medicare Advantage recipients in Pennsylvania, New York, and Florida be the only ones that don't face cuts? Why should taxes and benefits and regulations be different across the country? It isn't enough to say that that is the cost of doing business in the Senate. Come on. Pennsylvania, New York, Michigan, and Vermont have two Democratic (or Socialist) senators. They were going to vote for the bill, but they were able to more adeptly leverage their votes. It is the other blue states that should be annoyed. Why didn't Illinois or California senators win more for their states? Or did they, and we just haven't found out yet?

And perhaps some lawyer who understands how these things work can explain how exempting Michigan and Nebraska in perpetuity from an excise tax is Constitutional under Article One, Section 8, Clause 1 which states
Imposts and Excises shall be uniform throughout the United States;
Why can't my state, North Carolina, or any other state where there are such non-profit insurers object on Constitutional grounds to being treated differently than those companies in Michigan and Nebraska?

UPDATE: Sen. Sanders' office has sent out this correction to the Politico article.
I wanted to write you a quick note to let you know that your blog post incorrectly says that my boss, Sen. Sanders, secured $10 billion for health centers in Vermont. The fact is that this funding is for the health center program nationwide - a program strongly supported by the likes of George W. Bush in addition to Democrats. I agree that the Politico article you cite is a bit misleading on this fact, but regardless, it is a fact.