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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

More Health Headaches for the States

As Ed Kilgore has noted on several occasions, the Senate is towing with a variety of opt-in or opt-out schemes for a health reform public option that would effectively shift major decisions (and perhaps hard-to-calculate costs) to the states. Said states have already been worrying about their share of the costs involved in expanding Medicaid coverage, which is a piece of the health reform puzzle in every version of the legislation.
Now, as Suzy Khimm of The New Republic reports, one draft version of the House bill (the one with a “negotiated rate” approach to the public option) boosts Medicaid eligibility significantly more than past versions (to 150% of the poverty rate). Although House leaders say states will be “held harmless” in the short run for the elibility increase, it´s not clear how that will be achieved, and where the state funds will come from for a much larger Medicaid population in the long run. So state leaders really do have a complicated task in ensuring they are prepared, fiscally and politically, to potential changes in the federal-state health care “partnership,” which could be just over the horizon.

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