It’s clear that the so-called “Cornhusker Kickback,” Ben Nelson’s deal to have the federal government pick up the cost for the expansion of Medicaid in Nebraska, will not survive to the final bill. What form the kickback will eventually take is not clear, and according to Live Pulse, Nelson is in negotiations to move it in one of two directions, which are truly diametrically opposed from one another.

Sen. Ben Nelson (D-Neb.) has begun negotiations with Senate Democratic leaders to expand his special Medicaid funding deal to all states or to allow states to opt-out of the Medicaid expansion in 2017, his spokesman told POLITICO Thursday.

“There are serious discussions,” Nelson spokesman Jake Thompson said [...]

Thompson said Nelson had always intended to push for other states to receive the same arrangement, which involved the federal government forever picking up Nebraska’s share of the Medicaid expansion. Senate leaders were unable to meet his demand during the December negotiations because they did not have a cost estimate from the Congressional Budget Office, Thompson said.

The Nebraska deal was “a way to put it in the Senate bill and discuss it in conference,” Nelson said.

Expanding the deal to all states would essentially federalize the Medicaid program at a certain income level. To maintain quality across the nation and streamline the program, it should ALL be federalized, but this would be a step in the right direction.

Giving states an opt-out, leaving poor people at the whim of state legislatures when they have almost no voice in the process, would be TERRIBLE from a variety of policy perspectives. Clearly, the states which offer precious little Medicaid options now would face a strong pull to revert back to that in the future. Having the expansion in place for three years before trying to yank it might be a bad PR problem, but traditionally, programs that serve vulnerable communities are always at risk of funding cuts, because the constituency isn’t broad enough to be a political force. As a result, millions of people expected to be covered by this plan simply wouldn’t get that coverage after 2017. Keep in mind that nearly half of the coverage expansion in this bill comes from expanding Medicaid.

There’s a simple choice here – preserve the Medicaid expansion, or basically offer it up as a sacrifice to Ben Nelson.

…By the way, Nelson thinks we shouldn’t have done health care reform, anyway. The argument that he’s looking for a way out gets stronger every day…

UPDATE: Incidentally, I want to reiterate what I said yesterday about this deal, and how telling it is that it’s practically the only piece of pork that Republicans have decided to criticize:

After the deal Ben Nelson got for his state, getting the federal government to accept 100% of the cost of any Medicaid expansion, passed as part of the Senate health care bill, Republicans used it as an example of the “outrageous” backroom deals being put forward to get individual votes. In actuality, it’s not all that outrageous, but pretty much how Medicaid should be managed, as a purely federal program, so poor people in less generous states don’t have to suffer from less help in managing their health care options. It’s also telling that Nelson is getting ripped for a deal to ensure funding for health care for poor people, when the OTHER funding deal he got would make Mutual of Omaha – and pretty much only Mutual of Omaha – eligible for a tax exemption. Any liberal seriously criticizing the former and neglecting the latter needs to look at their priorities.

More than “telling,” it’s actually expected – anything that helps poor people is “outrageous spending,” while the run-of-the-mill corruption and huge public subsidies from corporate welfare are hardly ever criticized. It’s stunning not only that Republicans are getting away with this, but that liberals are actively helping them.