Richard Cordray (D-Ohio)

Terry Goddard (D-Ariz.)

Ben Nelson (D-Neb.)

COLUMBUS, Ohio (Legal Newsline)-At least two Democrats on Friday became the first came out against a provision in the federal health care overhaul being debated in Congress that would allow Nebraska to avoid increased Medicaid costs.

Ohio Attorney General Richard Cordray of sent a letter to his state's congressional delegation, urging them to strip the controversial provision from the bill, while Arizona Attorney General Terry Goddard drafted a proposed letter he sent to his state's Republican governor, Jan Brewer, asking her to join him in sending, decrying the deal.

The provision in the Senate-approved health care plan that exempts Nebraska from having to pay Medicaid expense increases was inserted into the bill to gain the support of Sen. Ben Nelson, a Democrat, who offered the 60th and final vote late last month needed to pass the plan aimed at expanding access to health care.

More than a dozen Republican attorneys general have threatened legal action if the provision is enacted. On Friday, Goddard and Cordray became the first Democratic AGs to come out publicly against the provision known as the Cornhusker Kickback and the Nebraska Compromise.

Goddard's letter follows his rejecting earlier calls by Brewer to investigate the constitutionality of the Nebraska Deal. Goddard, who is widely expected to run for governor this year against Brewer, responded to the governor's request, saying her request was premature, noting that the federal health care bill has not been finalized.

However, in his letter proposed letter to the Arizona delegation, Goddard expresses strong opposition to the "sweetheart deal" for Nebraska, denouncing it as "poor public policy and not in the best interest of Arizona or the nation," a statement said.

Goddard's proposed letter reads: "Indeed, the Nebraska Compromise would operate to the disadvantage of every state and territory other than Nebraska. Arizonans and other U.S. taxpayers would be forced to pay for the proposed special benefit for Nebraskans only. They burden would be fundamentally unfair."

In his letter, Cordray too said it would be unfair to have his state's taxpayers help absorb Nebraska's Medicaid costs.

"Given all the effort we put in every day to protect taxpayer funds that go to pay for Ohio's Medicaid program, I must in good conscience oppose the notion that Ohio taxpayers would be required to fund those same costs for the people of an entirely different state," he wrote. "And so I would ask that you strenuously oppose this provision and work to see that it is removed from the pending health care legislation before it is finalized."

For his part, Nelson, the Nebraska senator, came out Thursday saying that all states -- not just his -- should be able to opt out of increased payments to Medicaid mandated under the proposed Senate health care legislation.

"I've been in serious discussions with Senate leaders and others to secure changes in the bill to treat all states equally," Nelson said. "At the end of the day, whatever Nebraska gets will apply to all states."

The Senate legislation requires that the states provide Medicaid coverage to anyone making up to 133 percent of the federal poverty level -- a move that will likely expand the number of Medicaid-eligible persons throughout the country and increase the financial burden on the states since they bankroll part of the program.

Before a final bill is sent to President Barack Obama, who has made health care reform the cornerstone of his domestic policy agenda, the House and Senate bills must be reconciled in conference committee.

From Legal Newsline: Reach staff reporter Chris Rizo at

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