Reconciliation Bill Tosses New York a Fiscal Hand Grenade

Edmund Haislmaier / March 20, 2010

The pending health care legislation would cover the uninsured mainly by dumping most of them into the federal/state Medicaid program. Not surprisingly, many states have objected to the additional costs that such a Medicaid expansion would impose on their taxpayers. Indeed, that was the motivation behind the infamous “Cornhusker Kickback” in the Senate bill, under which the Federal government would pick up all of Nebraska’s Medicaid expansion costs in perpetuity.

In response to complaints from governors and state lawmakers, coupled with public outrage over the “Cornhusker Kickback,” section 1201 of Speaker Pelosi’s reconciliation bill amends the Senate bill to have the federal government cover all of the extra Medicaid benefit costs for all states in the first three years (2014-2016) with the federal share then declining so that from 2020 onward the Federal government would pay 90 percent of the costs with state taxpayers covering the remaining 10 percent. (more…)