Attorney General Henry McMaster said he and his counterparts in Alabama, Colorado, Michigan, North Dakota, Texas and Washington state - all Republicans - are jointly taking a look at the deal they've dubbed the "Nebraska compromise."
"The Nebraska compromise, which permanently exempts Nebraska from paying Medicaid costs that Texas and all other 49 states must pay, may violate the United States Constitution - as well as other provisions of federal law," Texas Attorney General Greg Abbott said.
McMaster's move comes at the request of Republican U.S. Sens. Lindsey Graham and Jim DeMint of South Carolina.
In a letter to McMaster, Graham singled out the deal to win Nebraska Sen. Ben Nelson's vote on the massive health care bill the Senate is expected to adopt Thursday. Nelson held out as fellow Democrats worked to get 60 votes to foreclose a GOP filibuster and the bill was amended to shield Nebraska from the expected $45 million annual cost tied to expanding Medicaid programs.
"We have serious concerns about the constitutionality of this Nebraska compromise as it results in special treatment for only one state in the nation at the expense of the other 49," Graham and DeMint wrote.
Nebraska wasn't alone in getting Medicaid breaks. Vermont, Louisiana and Massachusetts also got help with their programs.
Along with Texas, officials in Washington, Alabama, Colorado and Michigan confirmed they were working with McMaster.
North Dakota Attorney General Wayne Stenehjem said he wasn't sure what could be done while the federal legislation remained under debate. Officials in the other states did not immediately respond to a request for comment.
Meanwhile on Tuesday, Tennessee's Republican Senate Speaker Ron Ramsey called for his state's attorney general to investigate the deal.
Ramsey, McMaster and Michigan's Mike Cox are running for governor in their states.
"Whether in the court of law or in the court of public opinion, we must bring an end to this culture of corruption," McMaster said. The negotiations "on their face appear to be a form of vote buying paid for by taxpayers," he said.
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McMaster is encouraging a South Carolina citizen to step forward to sue to challenge the measure if it is signed into law. "We'll assist anyone to the extent that we're able," McMaster said.
Also Tuesday, U.S. House Majority Whip Jim Clyburn, D-S.C., said Republicans need to stop complaining about deals their colleagues made.
"Rather than sitting here and carping about what Nelson got for Nebraska, I would say to my friends on the other side of the aisle: Let's get together and see what we can get for South Carolina," Clyburn said.
For instance, Clyburn expects states will get more help covering Medicaid expansion costs. Critics say the federal government's coverage of 91 percent of those future costs will disappear, leaving states with huge holes in their budgets. Clyburn says the legislation the federal share should be 95 percent, with states picking up no more than 5 percent.
South Carolina Gov. Mark Sanford said the federal legislation is "well intended," but called it "fundamentally flawed in the same way the stimulus efforts were in that the states and the taxpayers are left footing the bill."
Sanford this spring was the nation's only governor to take a state legislature to federal and state court to block federal stimulus money.