Political harball works: "Payoffs for states get Reid to 60"

Politico:

Ben Nelson’s “Cornhusker Kickback,” as the GOP is calling it, got all the attention Saturday, but other senators lined up for deals as Majority Leader Harry Reid corralled the last few votes for a health reform package.

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.
buy-in.

But another Democratic holdout, Sen. Bernie Sanders (I-Vt.), took credit for $10 billion in new funding for community health centers, while denying it was a “sweetheart deal.” He was clearly more enthusiastic about a bill he said he couldn’t support just three days ago.

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.

Under pressure from the White House to get a deal done by Christmas, Reid was unapologetic. He argued that, by definition, legislating means deal making and defended the special treatment for Nelson’s home state of Nebraska.

“You’ll find a number of states that are treated differently than other states. That’s what legislating is all about. It's compromise," he said.

It was Nelson who proved that he who plays hardest to get, gets the most.

He forced Reid to redraft the bill’s restrictions on federal funding of abortion. And while most insiders were focused on that deal, Nelson was quietly ensuring that his state would never have to pay for the Medicaid expansion being written into the bill – an agreement that had been in the works for weeks.

Medicaid is usually paid for with a mix of federal and state funding, but Nelson's carve out means that any Medicaid beneficiaries who join the program under the bill will be fully paid for by the federal government.

It's an important deal considering that many governors are worried that the Medicaid expansion will further strain already stressed state budgets – and one that came after Nebraska Gov.Dave Heineman called on Nelson to vote against the bill.

"The State of Nebraska cannot afford an unfunded mandate and uncontrolled spending of this magnitude,” the governor wrote to Nelson.

Nelson deferred all questions on the provision to Reid, saying only that he was “comfortable” the deal took care of Nebraska.

But Nelson’s deal could be a pittance compared to where the Nebraska compromise might ultimately lead – to 49 other states demanding that the feds pick up their share of health reform’s new Medicaid burden when it kicks in during 2017.

"When you look at it, I thought well, God, good, it is going to be the impetus for all the states to stay at 100 percent [federal funding]. So he might have done all of us a favor," Sen. Tom Harkin (D-Iowa) said of Nelson’s dealings.

Nelson and Levin also pushed a provision that exempts non-profit insurers in Nebraska and Michigan from an annual multi-billion dollar excise tax on insurance companies.

Not surprisingly, both states are home to non-profit insurers who control a high-percentage of the industry’s profits. In Michigan, non-profit insurers control 76 percent of the industry’s profits – one of the highest percentages in the nation – while Nebraska non-profits control 46 percent of their state’s profits.

And in an example of how closely senators guarded details, Levin’s office did not answer any questions about the proposal when asked about it on Friday.

Republicans, meanwhile, expressed outrage at the wheeling and dealing, as if their party had never cut a legislative deal in its 150-year history.

“This bill is a monstrosity, a 2,100-page monstrosity full of special deals for people who are willing to vote for it,” said Senate Republican Leader Mitch McConnell. “And they’re playing these kind of games with the nation’s health care. This is an outrage.”

But Sanders didn’t sound outraged when he talked about the extra Medicaid funding Vermont will get for six years. Massachusetts, meanwhile, received three years worth of additional Medicaid funding. Under the original bill, neither state had qualified for the money.

Republican Sen. Mike Enzi accused Democratic leaders of favoring Medicare Advantage beneficiaries in Pennsylvania, New York and Florida at the expense of seniors in other parts of the country.

“The Democrats are playing ‘Let’s make a deal’ with trillions of your hard-earned tax dollars. You and all the American people should know that the majority leader is buying his votes with your money,” said Enzi (R-Wyo.) “The Reid bill gives sweetheart deals to a few states and the rest of the country will foot the bill. Making unfair deals like this is the wrong way to legislate and the American people know it.”

And while there were plenty of state-specific deals, some of the changes were clearly aimed at pleasing specific Democratic factions. For instance, tightened insurance regulations went a long way toward putting a smile on the faces of liberal senators who have lost their much-loved public option.

The amendment mandates that insurers spend no less than 80 percent of their premium revenues providing medical care. Currently, insurers spend about 70 percent of their premiums paying for health care. The bill also eliminates insurers’ ability to cap annual coverage amounts.

In brief remarks at the White House, President Barack Obama also highlighted some new provisions, including penalties for insurers who “arbitrarily jack up rates” and an immediate prohibition on insures’ ability to deny children coverage.

Obama, too, talked of the deals as just the cost of doing business in Washington.

“As with any legislation, compromise is part of the process,” Obama said. “But I'm pleased that recently added amendments have made this landmark bill even stronger.”