Federal System and Government Paper

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Federalism Paper (50pts.): The objective of this paper is to illustrate that you understand the federal system, the separation of powers and responsibilities of state governments and the federal government. 1) Find an article describing a current event that is an example of federalism. (e.g. health care, medicinal marijuana, immigration, gun rights, etc.) 2) The paper should include: a. Summary of the article. b. How is this current event an example of federalism? c. Who should have the responsibility for this issue (state control, federal control, shared responsibility)? And why? d. What direction does it appear the issue is going (state control, federal control, shared responsibility)? e. How does the current responsibility differ from what the framers intended (dual federalism) when they wrote the tenth amendment? 3) Paper should be two pages double spaced with appropriate citation of the current event source. 4) Wikipedia is not a source. Acceptable sources are newspapers (e.g. Oklahoman, News York Times, etc.) and magazines (e.g. Time, Newsweek, etc.) 5) You need to turn in a copy of the current event article with your paper. 6) Remember to submit your paper in the dropbox on D2L. ...
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Tutortitus
School: Duke University

Hello, attached are the complete assignment and the article used. Thank you

Federalism is governance the system in which administrative power is divided between a
central government and regional governments, in which both governments enjoy sovereignty. In
the United States, the federal government and state government possess sovereignty. Separation
of powers is the division of power among the legislature, executive and judiciary and their
recognition as distinct departments of the national government of America.
This article by Abbe R. Gluck and Nicole Huberfeld highlights the role of both federal
and state governments in the execution of the health care policy. In the last eight years, there has
been the conception of Affordable Care Act (ACA) by President Obama, which has adopted
federalism by delegating to the state government as the Affordable Care Act implementers (pg.
1). This has particularly been viewed as a significant example of modern-day federalism. The
article critically examines the standpoint of the issue of health care based on the position of the
federal government and state government in the implementation of the policy (pg. 113).
Health care is an example of federalism in the United States. This is specifically not
because of the separation between state and federal government but because of its structure that
promotes the implementation of policy by the state government. Health care, therefore, falls
precisely into modern federalism. While the precedence of the state over health care issues
definitely remains, major decisions concerning the allotment of power in health care are now
generally coming, not from states but rather from policy decisions by Congress. This has led to
the need to critically examine the level of success of federalism in health care policy. An attempt
to quantitatively gauge the ACA’s federalism in execution, assessing exactly where federalism
succeeded and where it failed has however been derailed by conceptual barriers in federalism
and health care theory.

The federal government should be endowed the responsibility of providing health
coverage for all. Majority of American citizens say the federal government has the responsibility
to ensure that Americans are medically covered in programs like ACA. According to the article
on by Kiley and Kiley (2018, October 03), on the new research website, more than eight-in-ten
Democrats and Democratic-inclining independents feel that the federal government should be the
one in charge of the citizens’ healthcare. This is in comparison to two-thirds of their Republican
counterparts, who feel it otherwise. According to Kiley and Kiley, a great proportion of the
Republican citizens are In the view that the government “should continue programs like ACA for
seniors and the very poor” with only one-out-of-ten wanting the government the government not
to take part in the provision of health insurance at all. The Democrats, on the other hand, are
divided in the middle on this issue with half for a single central health insurance system under
the federal government and the other half opposing it.
The responsibility of health care seems to be in the direction of shared responsibility
between the federal government and the state governments. This is because a majority of the
state governments are willing to receive help from the federal government especially where the
federal government possesses certain economies of scale. Assistance on the health care issue
would also include technical execution as well as administrative help. This would still ensure
that the provision of policy development and execution remain with the state government. This,
however, has notable drawbacks, the most significant being jeopardizing transparency. It was
seen that the states that exploited this shared-responsibility did so because this arrangement
allowed them to bypass the fact they were getting help from their federal constituents.
According to the tenth amendment, the federal system should not allow the federal
government to exercise power on state governments as if they were its functional units.

Congress, therefore, seeks to exercise its power by promoting the implementation of national
programs by the State in what is known as dual federalism. A majority of citizens seem to prefer
the healthcare issue is governed by the federal government. Therefore, based on the current
responsibility allocation, there is no similarity to what the framers intended.

References
Gluck, A. R., & Huberfeld, N. (2018). What is Federalism in Health Care for?.
Kiley, J., & Kiley, J. (2018, October 03). 60% in the US say health care coverage is the
government's responsibility. Retrieved February 10, 2019, from
http://www.pewresearch.org/fact-tank/2018/10/03/most-continue-to-say-ensuring-healthcare-coverage-is-governments-responsibility/


What Is Federalism in Health Care For?
70 STAN. L. REV. XXX (2018)
ARTICLE

What Is Federalism in Health Care For?
Abbe R. Gluck & Nicole Huberfeld ∗
Introduction
Federalism is all the rage in health policy again. For the past eight years,
President Obama’s Affordable Care Act, which embraced federalism by
designating the states as the ACA’s frontline implementers, has been cited as a
particularly prominent example of modern federalism. 1 Indeed, the ACA has
been deemed a prototypical example of federalism in dozens of articles—many
of them not only about health care. 2 With the new Administration, federalism
has stayed at the forefront of the health care policy conversation. The bills
proposed to replace the ACA, as well as the executive branch’s administrative
efforts, are heavy on state options and waiver opportunities. 3 But every


Professor of Law and Faculty Director, Solomon Center for Health Law and Policy, Yale
Law School; Professor of Health Law, Ethics & Human Rights, Boston University School of
Public Health, Professor of Law, Boston University School of Law. Thanks to Tom Baker
and Ted Ruger, who helped initiate this project, to Rick Hills, Tim Jost, Heather Gerken.
Sara Rosenbaum, Sarah Dash, Heather Howard, Jane Perkins, Mark Regan, Bill Eskridge,
Judith Resnik, Roberta Romano, Judy Solomon, Kevin Lucia, and Justin Giovannelli for
wise feedback; to Yale Law students Nathan Guevremont, Samir Doshi, Cameron Etchart,
Jade Ford, Erica Turret, and UK Law student Patrick Eavenson for truly outstanding
research assistance; and to participants at workshops at Yale and Hastings Law Schools for
valuable feedback. We are also deeply grateful to all of the current and former state and
federal officials we interviewed.
1 See Abbe R. Gluck, Intrastatutory Federalism and Statutory Interpretation: State
Implementation of Federal Law in Health Reform and Beyond, 121 YALE L.J. 534, 539-40
(2011) (describing some of the many modern federalism structures in the statute).
2 See, e.g., Josh Bendor & Miles Farmer, Curing the Blind Spot in Administrative Law: A
Federal Common Law Framework for State Agencies Implementing Cooperative Federalism
Statutes, 122 YALE L.J. 1280, 1287 (2013); Jessica Bulman-Pozen, Executive Federalism
Comes to America, 102 VA. L. REV. 953, 969 (2016); Erwin Chemerinsky et al., Cooperative
Federalism and Marijuana Regulation, 62 UCLA L. REV. 74, 118 (2015); Heather K.
Gerken, Windsor’s Mad Genius: The Interlocking Gears of Rights and Structure, 95 B.U. L.
REV. 587, 598 (2015); Michael S. Greve, Our Federalism Is Not Europe’s It’s Becoming
Argentina’s., 7 DUKE J. CONST. L. & PUB. POL’Y, no. 1, 2012, at 17, 32; Orrin G. Hatch,
King v. Burwell and the Rule of Law, 63 UCLA L. REV. DISCOURSE 2, 10 (2015); Gillian E.
Metzger, Agencies, Polarization, and the States, 115 COLUM. L. REV. 1739, 1772 (2015);
Hannah J. Wiseman, Regulatory Islands, 89 N.Y.U. L. REV. 1661, 1686-87 (2014).
3 See S. Amend. 1030 to H.R. 1628, 115th Cong., 163 CONG. REC. S5682 (as proposed Sept.
13, 2017), https://www.congress.gov/crec/2017/09/13/CREC-2017-09-13.pdf; American
Health Care Act of 2017, H.R. 1628, 115th Cong. (as passed by House, May 4, 2017),
https://www.congress.gov/bill/115th-congress/house-bill/1628/text; see also Henry J. Kaiser
Family Foundation, Compare Proposals to Replace The Affordable Care Act,
https://www.kff.org/interactive/proposals-to-replace-the-affordable-care-act/ (last visited
Jan. 28, 2018) (comparing all of the repeal bills).

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70 STAN. L. REV. XXX (2018)
Republican proposal likewise has kept the federal government in the picture,
preserving many of the ACA’s distinctive national-level interventions while
also preserving the ACA’s state-centricity. 4 At the same time, and despite the
laser focus on state-federal relations under the law, little detail has emerged on
how the ACA’s federalism actually operates in practice and what, if anything,
is noteworthy about it.
This study builds on a research effort conducted by the authors with
colleagues at the University of Pennsylvania that tracked the details of ACA’s
federalism-related implementation from 2012-2017. The work was driven by
many questions. Central among them were: Does the ACA actually effectuate
“federalism,” and what are federalism’s key attributes when it is entwined with
national statutory implementation? How did the ACA’s federalism take shape
and what was its purpose? A federal law on the scale of the ACA presented a
rare opportunity to investigate how modern federalism works from a statute’s
very beginning.
The deep description that we develop in the pages that follow gives rise to
an almost unmanageable number of questions about federalism theory. It
deconstructs assumptions about federalism that theorists of all stripes make—
and not just constitutional-law-oriented federalists, who focus on formal
separation, 5 but also those who call themselves the “new school” federalists,
who acknowledge and celebrate the importance of the state role in the
administration of modern federal statutes. 6 The findings also uncover a
theoretical muddle when it comes to health care law and policymaking: without
a clear conception of the American health care system’s goals, how can we
know which structural arrangements serve it best, much less whether they are
working?

4

See S. Amend. 1030 to H.R. 1628, 115th Cong., 163 CONG. REC. S5682 (as proposed Sept.
13, 2017), https://www.congress.gov/crec/2017/09/13/CREC-2017-09-13.pdf; American
Health Care Act of 2017, H.R. 1628, 115th Cong. (as passed by House, May 4, 2017).
5 See Heather K. Gerken, The Supreme Court 2009 Term—Foreword: Federalism All the
Way Down, 124 HARV. L. REV. 4, 11-13, (2010) (describing the classic sovereignty account
of federalism).
6 See, e.g., Heather K. Gerken, Federalism and Nationalism: Time for a Détente?, 59 ST.
LOUIS U. L.J. 997, 1005 (2015) (arguing for a modern understanding of federalism that
incorporates national power); Erin Ryan, Response to Heather Gerken’s Federalism and
Nationalism: Time for a Détente?, 59 ST. LOUIS U. L.J. 1147, 1152-53, 1159-60 (2015)
(noting the importance of state-federal bargaining as the critical element of modern
federalism); Ernest A. Young, The Rehnquist Court’s Two Federalisms, 83 TEX. L. REV. 1,
130-36 (2004) (noting that federalism practically occurs through statutory doctrines such as
preemption due to the Supreme Court’s broad interpretation of Congress’s enumerated
powers).

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Our key descriptive findings are outlined in the Summary directly following this Introduction. In brief, we find the ACA’s federalism to be exceedingly
dynamic and adaptive. The statute’s framework turned out to be only a starting
point for a vertical and horizontal process of intergovernmental bargaining,
through which states and the federal government implement the law through
copying, negotiating, and adapting. The statute’s structural architecture is also
decidedly non-essentialist from a federalism perspective: 7 that is, federalism’s
commonly cited attributes—including autonomy, variation, and experimentation—have been generated across virtually every kind of state-federal
arrangement in the statute’s implementation. Those federalism benefits, in
other words, were not dependent on any architecture of either state-federal
separation or entanglement.
As one example, take Medicaid, the public insurance program for lowincome individuals. Some states expanded Medicaid eligibility precisely as the
ACA’s text laid out; others chose not to expand at all; still others negotiated
(and renegotiated) waivers to tailor Medicaid to their liking, in ways less than
ideal to the Obama Administration. 8 All of these states experienced autonomy;
all of their choices generated policy localism and experimentation. Waiver
states arguably simultaneously cooperated with the federal government and
dissented. Were the waiver states more or less cooperative than other expansion
states? Were they more or less autonomous than states that did not expand at
all? In the end, it proved impossible to assign weights to the different ways that
federalism attributes emerged and the structural architecture that produced
them, because they emerged from virtually every possible state-federal
arrangement under the law.
This does not mean that we conclude that federalism is an empty concept,
or that it does not exist in the ACA. Instead, we stake out a new place on
federalism’s messy spectrum. On one end, some scholars insist on an all-ornothing conception, one in which state power is derived from separation from
the federal government and where the Constitution draws the critical lines. 9 At
another point on the spectrum are those who see arrangements like the ACA
and say federalism does not exist at all: they instead see mere decentralization
and use of states in a subservient and managerial way. 10 Still others brand
7

See Judith Resnik, Accommodations, Discounts, and Displacement: The Variabilty of
Rights as a Norm of Federalism(s), 17 JUS POLITICUM 209 (forthcoming 2017) (rejecting as
“essentialist . . . the presumption of the naturalness of federal or of state exclusivity, as if
certain kinds of activities were intrinsically only to be left to a particular level . . . .”).
8 See infra Part IV.
9 Gerken, supra note 5.
10 See MALCOLM M. FEELEY & EDWARD RUBIN, FEDERALISM: POLITICAL IDENTITY AND
TRAGIC COMPROMISE, at ix (2008) (suggesting that some aspects of modern federalism are
actually just “managerial decentralization.”).

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themselves modern federalists and see state activity within federal frameworks
as non-sovereign activity that serves nationalism and works as a safety valve
for the expression of dissenting views. 11 Our data do not fully support any of
those stories.
To the contrary, the data make clear that the ACA implementation is
indeed a story about state leverage, intrastate governance, and state policy
autonomy, even within a national statutory scheme. That these, and other
common federalism values, were effectuated independently of any particular
structural arrangement or formal separation may be difficult for some
federalism aficionados to swallow, but it is a key conclusion of the paper and
one we think offers a new perspective. It also complicates what it means to be
an essential attribute of “federalism.” For instance, our study illustrates that
policy variation and experimentation—two oft-referenced federalism attributes 12—were generated as much in the various nationally-run insurance
exchanges as in the state-run exchanges. Those attributes thus do not seem
unique to federalist arrangements, even though theorists typically call on
federalism to produce them. Sovereignty does not seem absolutely necessary
either, although it played a key role at times. And with respect to autonomy,
full structural separation of states from the ACA (i.e., total nationalization)
would have diminished state power far more than giving states the leadimplementation role that they had. More than anything else, we found that
state participation and choice, rather than any particular structural allocation,
gave states the most power under the ACA.
To be sure, aspects of ACA implementation will not resonate with federalism scholars at all. For starters, we begin with the view that national
intervention in health care is unavoidable and that the ACA was not a unique
interloper in an otherwise exclusive sphere of state authority. That will be
anathema to the constitutional-law-tethered federalists. But as we illustrate, the
ACA is only the latest instance in a long pattern of incremental, national health
care interventions. 13 That history renders mostly irrelevant constitutional
arguments about federalism in health care and the views of classic federalists
who slice the world into separate compartments of federal and state authority. 14
Instead, state-federal allocation in health care has been, from the beginning, a
feature of congressional design more than of any constitutional mandate
requiring exclusive domains. One of us has called this “intrastatutory

11

See Gerken, supra note 6.
See, e.g., Edward L. Rubin & Malcolm Feeley, Federalism: Some Notes on a National
Neurosis, 41 UCLA L. REV. 903, 923–24 (1994) (recounting variation and experimentation
as “instrumental argument[s] for federalism).
13 See infra Part II.
15 Gluck, supra note 1, at 538.
12

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federalism”: federalism arrangements produced by federal statutes themselves. 15
Further, the ACA’s deployment of the states, even as it empowered them,
almost certainly has helped to enact and entrench the statute. That is a
nationalist end, served by state-implementation means, and one that most
would not associate with traditional federalism values. The existence of these
vectors of state power and state service in the same story complicates it
tremendously.
In the end, however, these different expressions and aims of federalism
matter only once we define what federalism is supposed to be, and what it is
for. Federalism is a term that today is difficult to pin down. 16 Our study
underscores both how federalism has tended to stand in for so many different
values—whether separation, checks and balances, variation, autonomy, or
experimentation— as well as for many different types of structural
arrangements , and how these attributes do not always line up coherently, even
within the same statute.
Health care fits right into this modern federalism story. While state
authority over areas of health care certainly remains, the major decisions about
allocation of power in health care have now typically come not from states as
the only accepted constitutional actors but rather from political and policy
decisions by Congress to incorporate states into federal schemes. The question
we set out to answer was whether this federalism actually succeeds in health
law. We initially attempted to quantitatively measure the ACA’s federalism in
implementation, evaluating where federalism delivered and where it failed. Our
efforts, however, were stymied by conceptual barriers in federalism and health
care theory alike.
The first problem we encountered was a federalism-theory problem. It was
impossible to weigh whether one type of structural arrangement was more
autonomous, sovereign, experimental, or cooperative because, as noted, aspects
of those attributes exist across all of the different state-federal allocations in the
statute. Federalism scholars always argue for structural decisions based on the
ends they wish to produce; our data question whether it is even possible to talk
about ends as related to any particular kind of structure, and whether federalism
has ever been properly defined by either side.

15

Gluck, supra note 1, at 538.
See The Federalist Society, Is Everyone Now For Federalism?, YOUTUBE (Nov. 17,
2017), https://www.youtube.com/watch?v=SjP9SNKhAKo (discussing the ambiguity about
what federalism is).
16

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The second problem we encountered was a health-policy-theory
problem: What is federalism in health care even for? Most of the health care
policy literature has failed to engage this threshold question of why we are
focused on state-federal allocation in health care in the first place. 17 (This
problem could be generalized to most any field, we suspect, but we confine our
analysis to health care. 18 ) For instance, we might view health care federalism
as being about federalism for federalism’s sake—federalism for political or
constitutional values—reserving some power over health care for states in the
interest of state sovereignty and balance of power, regardless of the effect on
health care coverage, cost, access, or quality. If so, we should examine if it
does in fact accomplish those goals. If, on the other hand, health care
federalism is a mechanism to produce particular policy outcomes, we should
examine instead whether locating a particular facet of health care design in the
states versus the federal government positively affects, for example, health care
coverage, cost, access, quality, innovation, or some other health policy aim.
Complicating matters further is the lack of theoretical foundation in the
field of health law in general. The field remains caught in centuries-old,
unresolved tension between the so-called “social solidarity” model—every
person should be guaranteed some minimal level of health care; and the
“individual responsibility” model—a person gets only the health care she can
pay for. 19 The ACA built on a fragmented system that compromises on both
sets of values and, while the ACA pushed the needle toward solidarity by
enacting policies aimed at universal coverage, it did not go all the way and still
leaves the field without clear core principles. 20

17 The most extensive treatment comes in the terrific 2003 Urban Institute volume,
FEDERALISM AND HEALTH POLICY 6-7 (John Holahan et al. eds., 2003), which posits different
reasons why federalism might be favored in health care. The authors conclude that: “U.S.
health policy reflects a shared approach to federalism . . . . There is little agreement that
either level of government would necessarily do better than the current arrangement.” Id.
18 Cf. Judith Resnik, What’s Federalism For?, in THE CONSTITUTION IN 2020, at 269, 270
(Jack M. Balkin & Reva B. Siegel eds. 2009) (illustrating the variety of causes to which
federalism has been turned in modern times).
19 See, e.g., Wendy K. Mariner, Social Solidarity and Personal Responsibility in Health
Reform, 14 CONN. INS. L.J. 199, 227 (2008) (“The peculiarly American mix of entitlement
and personal responsibility in today’s health reform proposals . . . mask deep divisions in
beliefs about whether society or the individual ought to be responsible for health. Trying to
have it both ways may make it impossible to agree on sustainable reform.”); see also Abbe
R. Gluck, America Needs to Decide: Is Heath Care Something We Owe Our Citizens?, VOX:
THE BIG IDEA (Mar. 18, 2017, 9:36 AM), https://www.vox.com/the-bigidea/2017/3/6/14826974/health-care-aca-philosophy-republican-obamacare (describing
current debates’ failures to engage with the tension that Mariner identified).
20 See Gluck, supra note 19.

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As such, federalism becomes even more difficult to measure because the
menu of potential health policy goals is not necessarily coherent. For instance,
health policy that decreases costs for the federal government is not difficult to
construct, and such a policy might also be deemed states’ rights or federalism
“friendly” if it pushes policy choices to the states. But such a policy could well
reduce access to care, especially for the poor, 21 and it would not be state
friendly if it increased the financial or regulatory burdens on states beyond
what they could meet. As another example, health policy that allows for
interstate variation might be a benefit of federalism, but it also leads to
significant inequality when it comes to health care access across the country. 22
For some, a moral belief in equality might trump whatever other benefits (like
policy variation) a federalist structure could generate. This is why, without a
clear goal, it is impossible to know whether federalism is simply a structural
preference regardless of its effect on health care or a substantive choice whose
success warrants verification.
This Article unfolds as follows: Part I summarizes the study’s key findings.
The ACA’s implementation was marked by structural dynamism, negotiation,
administrative pragmatism, complex intrastate politics, and interstate horizontal
competition and learning. Part II provides an abbreviated history of federalism
and nationalism in health care and situates that history in modern theories of
federalism. Part III details the ACA’s federalism structure and provides
background on our five-year study of the implementation of two of the ACA’s
key pillars, which were also its most state-centered components: the Medicaid
expansion and the health insurance marketplaces (called “exchanges”). 23 Parts
IV and V offer a deep dive into the federalism features of Medicaid and
exchange implementation respectively. Part VI circles back to the question of
what federalism in health care is for and extrapolates lessons that can be
learned.
We conclude that the ACA’s story substantiates the existence of some
federalism attributes within federal administration under the right circumstances. For instance, state leverage and policy flexibility—including the leverage
and flexibility to work to undermine the law--seem real when states have
choices to make that are important to a statute’s success. Those characteristics
21

See infra Part III.A.
See, e.g., Samantha Artiga et al., The Impact of the Coverage Gap for Adults in States Not
Expanding Medicaid by Race and Ethnicity, HENRY J. KAISER FAM. FOUND. (Oct. 26, 2015),
https://www.kff.org/disparities-policy/issue-brief/the-impact-of-the-coverage-gap-in-statesnot-expanding-medicaid-by-race-and-ethnicity (documenting significant health disparities in
states that chose not to expand Medicaid).
23 Many of the dynamics we describe play out in other areas of state-federal relationships in
health regulation, but that was not the focus of our study, nor has federalism been at the
forefront of those areas in such stark exposition as in the case of the ACA.
22

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in turn serve state sovereignty, as we discuss. But other federalism attributes
may not be dependent on states being involved at all—including the famous
Brandeisian federalism values of experimentation and variation. 24 We saw
those values emerge from nationally-run aspects of the ACA, too, and did not
see any evidence that state-run components did any better. Perhaps these no
longer should be thought of as classic “federalism” values at all.
We recognize that thus deconstructing federalism’s key attributes poses
dizzying complexities not only for conceptualization but also for legal doctrine.
As one of us has detailed elsewhere, federalism doctrine has barely moved past
the separate-spheres conception. But it must if the various values we associate
with federalism are worth protecting, because they now emerge outside of
separate-spheres design. Moreover, the values are many and are not always
produced together by the same state-federal structural arrangement. Yet we
continue to invoke federalism as single placeholder for all these different
things. Recognizing these developments and concretizing what is essential to
federalism is necessary to effectuate and evaluate it—not only in the ACA, but
beyond.

I.

Summary of Key Findings

Several findings from this study should be of particular interest to federalism experts, health-oriented or not. First, we found the ACA’s federalism to be
dynamic, negotiated, adaptive, and horizontal. It was marked by horizontal and
vertical intergovernmental activity. States copied other states and leveraged the
success of forerunners for more gains in later negotiations. 25 The federal
government adapted each time, setting the stage for the next round of activity.
This federalism was multidirectional, not an on-off switch: States have changed
structural architecture in both directions, moving between state-led and
federally-led models and vice versa. 26 State choices move in waves. 27
Second, the ACA’s federalism embraced a fascinatingly pragmatic and
creative hybrid of national and state-level solutions that we have not seen
theorized elsewhere in the federalism literature and that emerged only in
24

See New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting)
(“It is one of the happy incidents of the federal system that a single courageous State may, if
its citizens choose, serve as a laboratory; and try novel social and economic experiments
without risk to the rest of the country.”).
25 The account of the negotiations we offer substantiates much of Erin Ryan’s work. See
generally Ryan, supra note __, at 1159-60 (discussing the breadth and importance of
bargaining between states and the federal government in the context of contemporary
federalism).
26 See infra Parts III, IV.
27 See infra Parts III, IV.

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implementation. The ACA’s initial framework turned out to be a mere starting
point for the ultimate allocation of authority. The hybrids that emerged also
struck a middle ground between “one and 50 options”—the typical way in
which we consider allocation of power questions, and the typical choice that
Congress makes in statutory design in areas that implicate the states. The ACA
implies that some lower number of structural options—four, eight, etc.—might
be the sweet spot between variety and efficiency. 28
We also found that many states were eager to accept the kind of
federal help for which the federal government has particular economies of
scale, including administrative and technical assistance, even as they wished to
retain control over policy decisions. 29 These hybrid solutions had negative
byproducts too. Most importantly, they jeopardized transparency. Some states
that took advantage of this hybrid approach did so because it allowed them to
hide the fact they were getting federal help from their constituents and, in some
cases, even from parts of their own governments. 30 The hybrids thus gave red
state officials cover to entrench the ACA but arguably came at a steep price
when it comes to accountability. One official colorfully called it the “secret
boyfriend model” of state-national relations: a relationship coveted by the
states, but one that states were unwilling to admit publically for political
reasons. 31
Third, the ACA’s federalism story highlights the importance of intrastate
governance. 32 Each state is an individual republic of its own, even as most
federalism scholars still talk about “the states” as a monolithic bloc. 33 But
states had different laws going into the ACA, which shaped policy making
decisions under the law. For instance, some states had generous pre-existing
insurance requirements, which affected the design of their exchanges. Other
states had laws about Medicaid policy, statutes which influenced governors in
their negotiations over whether and how to expand that program in their own
state under the ACA.
State actors also have significant differences among them. 34 State insurance commissioners (most of whom are elected) view health policy differently
28

See infra Part II.C.
See infra Part V.B.
30 See infra Part V.B.2.
31 Interview with Former Federal Executive Branch Health Care Officials 2, 3, and 4 (Aug.
5, 2016).
32 See infra Parts IV.B, V.D.
33 For an important exception, see Roderick M. Hills, Jr., Dissecting the State: The Use of
Federal Law to Free State and Local Officials from State Legislatures’ Control, 97 MICH. L.
REV. 1201, 1203 (1999).
34 See infra Parts IV.B, V.D.
29

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from governors, who themselves take a different position from legislators, even
those within the same party. The ACA’s implementation saw many governors
bucking legislators in their own party to take advantage of the ACA’s benefits
to their states—often using pre-existing features of state law to do so—
underscoring the different priorities of different members of state government
and the different structures of the state governments themselves. These internal
dynamics within a particular state have a profound, and mostly unrecognized,
influence on national policy. 35
Fourth, Parts IV and V’s deep dive into implementation deconstructs
federalism’s commonly touted attributes and so reveals the complications for
empirically measuring federalism in health care and beyond. We suggest that
many of the most common “federalism” questions are unanswerable or at least
seriously oversimplified. Take for instance the popular topic of whether states
are engaging in “cooperative” or uncooperative (disobedient) federalism, and
the related question of whether certain structural arrangements serve state
autonomy. 36 The ACA allowed states to choose whether to operate their own
health insurance exchanges or to have the federal government do so for them. 37
Many believe that “blue” states cooperated by establishing their own state-run
exchanges and that “red” states rebelled by defaulting to a federally-run
exchange. This binary is too simplistic. When Oregon, for example, switched
from a state-run to a federally-supported exchange 38 did it suddenly become
“uncooperative”? Or was Oregon still cooperating by defaulting to the national
exchange platform, even though the common wisdom is that red states that did
the exact same thing were not cooperating and were more autonomous?
As for “rebellious” states, were they more sovereign, autonomous, and
uncooperative in the context of the exchanges—even though, as a result of their
refusal to implement the exchanges themselves, they paradoxically welcomed
the federal government takeover of their insurance markets? 39 Or did other
states instead better exert and increase their own sovereign power when they
implemented the ACA themselves, typically making their own policy choices
35

Our account responds to Rick Hills’ longstanding call to “dissect” the states and develop a
federalism story that recognizes the differences both among the states and also among
various governmental players within each state. See Hills, supra note 33, at 1203.
36 See Jessica Bulman-Pozen & Heather K. Gerken, Uncooperative Federalism, 118 YALE
L.J. 1256, 1258-59 (2009).
37 See infra Part III.A.
38 Louise Norris, Oregon Health Insurance Marketplace: History and News of the State’s
Exchange, HEALTHINSURANCE.ORG (Sept. 14, 2017),
https://www.healthinsurance.org/oregon-state-health-insurance-exchange (“Oregon initially
had a fully state-run exchange—Cover Oregon—but it was plagued with technological
failures, and never worked as planned.”).
39 See infra Part V.

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and passing state laws to do so? Regardless of the structural arrangement
chosen, it is clear that states would have enacted far fewer health-care related
laws, and been in control of far less health policy, had they been left out of the
ACA entirely. In other words, constitutional federalism’s preference for
formalist and exclusionary structural arrangements would not have served the
values here that they are supposed to serve. States exerted power, leverage, and
checks on the federal government, in addition to being in control of policy,
from within the statute. Not from outside of it.
In exploring all these topics, we build upon the recent wave of new
federalism scholarship, work that has been occupied with mapping and
explicating federalism across all subjects in an age of national power. 40 As
should be clear, and as we elaborate in Parts IV and V, our data challenge areas
of this research. The ACA’s federalism does more than serve nationalist ends,
as some new federalism scholars would argue. And it also gives the states more
power than that account allows. At the same time, the ACA’s story demolishes
the utility of the concept of “cooperation” in federalism, beloved by modern
federalism scholars, because the concept illuminates nothing in this context.
Indeed, the ACA challenges even more broadly the very notion that any
particular structural arrangement is required to produce most of the values we
associate with “federalism” at all.
Finally, this article also responds to a particular wakness of general
federalism scholarship by pausing to examine the deep details of the ACA’s
federalism in operation. As one of us has chronicled, federalism theory tends to
be big on abstraction and low on concreteness. 41 Detailed exposition situated in
both history and theory is wanting, and we hope to provide that here.
II. Health Care Federalism, Old and New
40

See, e.g., Jessica Bulman-Pozen, Federalism as a Safeguard of the Separation of Powers,
112 COLUM. L. REV. 459, 461 (2012) (arguing that states increasingly use cooperative
federalism to challenge federal executive power and enforce federal statutes); Abbe R.
Gluck, Our [National] Federalism, 123 YALE L.J. 1996, 1998 (2014) (arguing that modern
federalism is a “National Federalism” created by federal statutory design); Greve, supra note
2, at 34-35 (highlighting American and Argentinian federalism as examples of federal states
increasingly using cooperative federalism); See also Ryan, supra note Error! Bookmark
not defined., at 1151-55 (situating environmental law in a theory of federalism that
collapses national and federal); Ernest Young, Federalism as a Constitutional Principle, 83
U. CIN. L. REV. 1057, 1067, 1076-77 (2015) (describing the enumerated powers strategy of
protecting federalism through constitutional law and advocating for the importance of
political and sociological forces in supporting modern federalism).
41 See Gluck, supra note 40, at 1998 (arguing that when it comes to federalism theory and
doctrine, “[w]e are still muddling through”); see also Robert A. Schapiro, Toward a Theory
of Interactive Federalism, 91 IOWA L. REV. 243, 285 (2005) (arguing that modern federalism
lacks “rules of engagement”).

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From the time the ACA was introduced, debates about the law’s desirability have been entangled with debates about American federalism. Politicians,
commentators, and scholars alike have portrayed the ACA as a federal
takeover, a uniquely nationalist intervention in the terrain of state health
policy. 42 Others have incorrectly theorized about the ACA’s structural
arrangements as a new and unique violation of constitutional lines of division
between states and the federal government in health care. 43
In fact, the ACA follows on a long history of national-level interventions
in state health regulation by the federal government, many with similar
structural features to the ACA itself. Nor is it the case that any of the recent
proposals to repeal or replace the ACA would restore some erased constitutional dividing lines between state and federal. Indeed, each Republican proposal
has kept intact the major federal programs and laws (for example, Medicaid,
Medicare, and ERISA) and massive federal subsidies (the most important
example being the employer tax deduction for health care that helps to insure
50% of all Americans).
Understanding this historical and legal context makes clear why we need to
move past arguments about formal constitutional federalism to arguments
about the policy and political choices—as well as concerns for states’ rights—
that go into allocation in modern federalism-based federal statutes. It also
explains why this is a paper about “federalism” that does not begin with the
possibility of a world in which the national government has no role in health
care but, rather, takes the ACA’s joint federal-state framework as given for the
kind of structure we are likely to see going forward, regardless of what happens
to the specifics of the ACA.
Interestingly, and consistent with the story we tell about the ACA, neither
federalism nor nationalism have ever been fully embraced in health care policy.
When it comes to federalism, long before the ACA, scholars had observed that
classic federalism values such as states as “laborator[ies]” of “experiment[ation]” 44 had often been effectuated in health policy not by traditional
federalism (the preservation of separate spheres of state authority) but by
42 See, e.g., Jonathan H. Adler, Cooperation, Commandeering or Crowding Out?: Federal
Intervention and State Choices in Health Care Policy, 20 KAN. J.L. & POL’Y 199, 199 (2010)
(arguing the ACA “extend[s] and deepen[s] federal regulation of health insurance”); Richard
A. Epstein, Bleak Prospects: How Health Care Reform Has Failed In The United States, 15
TEX. REV. L. & POL. 1, 10-11 (2010); Melinda Henneberger, ‘Frankly, It’s Bull----’:
Kathleen Sebelius Is Fighting Mad About Obamacare Attacks, KAN. CITY STAR (Oct. 13,
2017, 7:46 PM), http://www.kansascity.com/opinion/opn-columns-blogs/melindahenneberger/article178823256.html (“‘It’s just nonsense’ the way it’s been portrayed as a
government takeover of health care,’ [Sebelius] said . . . .”).
43See infra Part II.C.
44 New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting)

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nationalism (federal laws setting a baseline and inviting state participation with
funding nudges). 45 States have been limited in what they can accomplish alone
in health care experimentation. 46 Disincentives, such as industry exit, prevent a
single state from bearing all of the costs of innovation risk if it is one of the few
making costly regulatory demands. 47 National statutes that allow for state
experimentation within federal law often provide a steadier path toward
experimentation. 48 The ACA offers a striking example: it was modeled on a
major Massachusetts experiment, which the state did not undertake alone but
rather with federal permission and funds (largely from the federal Medicaid
program). 49
On the other side, health care nationalism often is characterized as an
oppressive interloper in state domains (and has been so characterized with
respect to the ACA). 50 But history shows not only that states sometimes need
federal intervention to make their own health care systems work—federal
intervention typically comes in response to some state regulatory or market
failure—but also that federal intervention, when it comes, tends to be focused
and incremental. Although Congress has debated fuller-scale national
programs 51 and has occasionally enacted laws that are sweeping (still never

45

Gluck, supra note Error! Bookmark not defined., at 1750.
See id. at 1764 (describing the ACA as a federal law incentivizing states to increase
experimentation); Susan Rose-Ackerman, Risk Taking and Reelection: Does Federalism
Promote Innovation?, 9 J. LEGAL STUD. 593, 594, 610-11 (1980) (analyzing the economic
impacts of risky state experimentation and explaining lack of incentives for states to do so);
Edward L. Rubin & Malcolm Feeley, Federalism: Some Notes on a National Neurosis, 41
UCLA L. REV. 903, 925-26 (1994) (noting that federal financial and organizational
assistance aids states in overcoming the free rider problem); David A. Super, Laboratories of
Destitution: Democratic Experimentalism and the Failure of Antipoverty Law, 157 U. PA. L.
REV. 541, 582-83 (2008) (describing states’ hesitation to experiment with welfare policies
due to population mobility).
47 See Super, supra note Error! Bookmark not defined., at 557.
48 See Gluck, supra note Error! Bookmark not defined., at 1764; Rubin & Feeley, supra
note Error! Bookmark not defined., at 925-26.
49 See Ryan Lizza, Romney’s Dilemma, NEW YORKER (June 6, 2011),
https://www.newyorker.com/magazine/2011/06/06/romneys-dilemma (detailing how
Massachusetts’s health reform was made possible by a Bush Administration Medicaid
waiver).
50 See, e.g., Nicholas Bagley, Federalism and the End of Obamacare, 127 YALE L.J.F. 1, 4
(2017) (“[T]he ACA . . . wrests more regulatory authority from states than necessary.”).
51 See, e.g., Henry J. Kaiser Family Found, National Health Insurance—A Brief History of
Reform Efforts in the U.S. (Mar. 2009),
https://kaiserfamilyfoundation.files.wordpress.com/2013/01/7871.pdf (summarizing health
care reform movements and failures of the twentieth century in anticipation of the thennascent Obama Administration’s effort).
46

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universal), it typically enacts compromise legislation that instills piecemeal or
targeted federal reform. 52
This strategy in turn has prevented a complete vision of health care
nationalism from being realized. Uniformity and equality of access to health
care are still wanting, and fragmentation of the American health care system
remains a salient problem. 53 Federal intervention has tended to be highly
incremental, and therefore incomplete. Take the ACA again as an example:
Despite being a major federal intervention in health policy, the ACA
perpetuated and entrenched the fragmentation of American health care by
expanding the various and very differently structured health care programs
already in existence—some state led, some federal, some mixed—rather than
starting fresh with a single, integrated approach. 54
The pattern is a recurring one of call and response between the states and
the federal government. We present here some highlights of this long story.
A.
Care

An Abbreviated History of Federal Interventions in Health

During the colonial era and beyond the Revolutionary War, medical care
was the domain of state and local governments when not being addressed by
private charities. But even in the early days of the Republic, the federal
government established payments for veterans’ war injuries and, later, hospitals
for veterans’ care (as well as merchant seamen). 55 A series of federal laws

52 See, e.g., Emergency Medical Treatment and Labor Act, 42 U.S.C. § 1395dd (2016)
(requiring only emergency medical treatment in hospitals); Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. No. 108-178, 117 Stat. 2066
(codified at 42 U.S.C. § 1395w-101 (2016)) (adding prescription drug coverage to Medicare
only).
53 THE FRAGMENTATION OF U.S. HEALTH CARE: CAUSES AND SOLUTIONS 9-15 (Einer R.
Elhauge ed., 2010).
54 See infra Part III.A.
55 See BARBARA MCCLURE, CONG. RESEARCH SERV., 83-99 EPW, MEDICAL CARE PROGRAMS
OF THE VETERANS ADMINISTRATION 1-4 (1983) (tracing the history of the VA); TIMOTHY
STOLTZFUS JOST, DISENTITLEMENT?: THE THREAT FACING OUR PUBLIC HEALTH-CARE
PROGRAMS AND A RIGHTS-BASED RESPONSE 77 (2003) (tracing various early federal
payments for health care, including merchant seamen). In 1811, Congress deducted a portion
of naval sailors’ pay to care for war veterans’ injuries; in 1833, Congress opened a naval
hospital; and in 1851 Congress established a home for disabled soldiers. See MCCLURE,
supra, at 1-2. There were fewer than fifty federal buildings outside of Washington D.C. in
1850, including courthouses, and hospitals numbered among them. JUDITH RESNIK & DENNIS
CURTIS, REPRESENTING JUSTICE: INVENTION, CONTROVERSY, AND RIGHTS IN CITY-STATES
AND DEMOCRATIC COURTROOMS 140-143 (2011).

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offered increasing responses to states’ inability to provide for veterans, 56 whose
medical needs became even more pressing after the Civil War. 57 Ultimately,
veterans’ health care was fully federalized; Congress created the United States
Veterans Bureau in 1921 to provide medical care for battle-injured World War
I soldiers, then later the Veterans Administration covered all medical care for
veterans. 58 The same year, Congress passed the Sheppard-Towner Maternity
and Infancy Act of 1921, which for the first time put the federal government
into the area of health and the family by providing states with funds for prenatal and newborn care. 59
The turn-of-the-century industrialization, and later the Great Depression,
World Wars, and an influx of the war-wounded illuminated the states’ inability
to handle the relatively new phenomenon of medical policy or payment alone. 60
Although wealthier states were able to increase spending to pay for their
swelling medically needy populations, most other states had no means to add
health care to the list of welfare programs that they already supported, so states
sought federal funding to care for the indigent. 61 President Roosevelt failed to
get healthcare included in the Social Security Act of 1935 and again attempted
it during World War II, followed closely by Senator Wagner’s proposed
National Health Act of 1939, which would have directed federal funds through
state administration. 62 President Truman likewise attempted to achieve national

56 See VETERANS ADMIN., 90TH CONG., MEDICAL CARE OF VETERANS 30 (Comm. Print
1967).
57 Id. at 59-62.
58 MCCLURE, supra note 55, at 2-3.
59 Office of the Historian, Historical Highlights: The Sheppard-Towner Maternity and
Infancy Act, U.S. HOUSE OF REPRESENTATIVES, http://history.house.gov/HistoricalHighlights/1901-1950/The-Sheppard-Towner-Maternity-and-Infancy-Act (last visited Dec.
27, 2017). Thanks to Rick Hills for this insight.
60 ROBERT STEVENS & ROSEMARY STEVENS, WELFARE MEDICINE IN AMERICA: A CASE STUDY
OF MEDICAID 5-36 (1974) (detailing various federal interventions to assist states with their
traditional role of providing both welfare and medical assistance throughout the early
twentieth century).
61 See STEVENS & STEVENS, supra note 60, at 7 (describing how the Federal Emergency
Relief Administration took over states’ welfare responsibilities during the Depression);
Nicole Huberfeld, Federalizing Medicaid, 14 U. PA. J. CONST. L. 431, 444 (2011)
(describing states’ inability to pay for welfare medicine).
62 See PAUL STARR, THE SOCIAL TRANSFORMATION OF AMERICAN MEDICINE 266-77 (1982).
One contemporaneous scholar described the Act as “merely another step, albeit a long step,
in the orderly development of existing federal health work, while the federal grants for
medical care, and the disability compensation program, cannot be thought of as radical
innovations, for they, too, have a broad body of precedent.” Harold Maslow, The
Background of the Wagner National Health Bill, 6 LAW & CONTEMP. PROBS. 606, 618
(1939).

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health coverage, 63 but fears of “socialized medicine” proved then, as they have
continued to be, an insurmountable obstacle to universal, nationalized reform. 64
After Truman’s national health program 65 was rejected, Congress took the
smaller step of encouraging the construction of hospitals where medical needs
were unmet through the Hill-Burton Act of 1946. 66 In return for this federal
funding, new Hill-Burton hospitals had to provide care to low income
individuals, formalizing so-called charity care. 67
During this period, developments in the courts confirmed that health care
could largely be handled—as a matter of law—as a national, rather than a state
or local, problem. In 1944, the Supreme Court ruled that insurance was national
commerce and could be regulated by Congress as such. 68 But Congress, in a
moment unappreciated by most federalism scholars (especially those unwilling
to recognize the concept of federalism as a congressional option), voluntarily
gave that power back to the states with the passage of the McCarran-Ferguson
Act of 1945. 69 That Act created a presumption that regulation of insurance
remains with the states, unless Congress explicitly states otherwise (as it did in
the ACA). 70

63 Special Message to the Congress Recommending a Comprehensive Health Program, 1945
PUB. PAPERS 475, 477, 490 (Nov. 19, 1945)
64 In addition, opposition to national health insurance and other national benefits was rooted
in part in racism and the “Southern question,” meaning that southern states were fearful that
the federal government would use national health programs as a mechanism to desegregate.
See DAVID G. SMITH & JUDITH D. MOORE, MEDICAID POLITICS AND POLICY 1965-2007, at 10
(discussing race as part of the reason that efforts to install national health insurance failed).
In addition, the American Medical Association fought national health programs as
“socialized medicine.” Id. at 25. The Journal of the American Medical Association went so
far as to call President Truman’s proposal an “attempt to enslave medicine . . . .” Id.
65 See Special Message to the Congress Recommending a Comprehensive Health Program,
supra note 63.
66 Public Health Service Act, Pub. L. No. 78-410, § 215, 58 Stat. 682, 690 (1944) (codified
at 42 U.S.C. § 216 (2016)); Pub. L. No. 93-641, §§ 1525, 1602(6), 88 Stat. 2225, 2249, 2259
(1975) (repealed 1979); 42 C.F.R. § 124 (2016) (setting forth community obligations for
hospitals that receive Hill-Burton funding).
67 42 C.F.R. § 124.501 (2016).
68 United States v. Se. Underwriters Ass’n, 322 U.S. 533, 552-53 (1944).
69 See 15 U.S.C. § 6701 (2016).
70 See 15 U.S.C. § 6701(b) (“No person shall engage in the business of insurance in a
State . . . unless such person is licensed as required by the appropriate insurance regulator of
such State in accordance with the relevant State insurance law . . . .”); id. § 6701(d)(4) (“No
State statute, regulation, order, interpretation, or other action shall be preempted . . . to the
extent that . . . it does not relate to, and is not issued and adopted, or enacted for the purpose
of regulating . . . insurance . . . .”).

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Concomitantly, in 1942, the War Labor Board ruled that World War IIrelated wage controls did not apply to fringe benefits such as pensions and
insurance, 71 and a few years later the National Labor Relations Board upheld
unions’ engagement in collective bargaining for benefits such as health
insurance. 72 Such federal policies motivated employers to offer greater benefits
to lure much-needed war-effort employees, helped further by an Internal
Revenue Service ruling in 1943 that employer-based health care would not be
taxable income for the employee. 73 Labor unions used this valuable benefit as a
bargaining tool 74 throughout the late 1940s and into the 1950s, 75 and the IRS
further pushed the trend by ruling in 1954 that employer-sponsored health
insurance was not taxable to employee or employer. 76
This significant series of interventions in private health insurance, as we
have previously written, has turned out to be one of the most overlooked and
underappreciated federal interventions in the typically state-based terrain of
health insurance. 77 Modern policy experts who oppose the “socialization” of
medicine (especially when it comes to health care for the poor), rarely
acknowledge the more-than $200 billion each year that the federal government
spent long before the ACA, subsidizing the health insurance of working
Americans. 78 Employer-sponsored health insurance benefits still account for
about 55% of health insurance coverage today, 79 rendering this tax subsidy—
for the wealthier, non-Medicaid population, no less—a major ongoing federal
intervention.
71

See TIMOTHY STOLTZFUS JOST, HEALTH CARE AT RISK: A CRITIQUE OF THE CONSUMERDRIVEN MOVEMENT 59-60 (2007) (expressing skepticism that the War Labor Board was
responsible for employer-sponsored health insurance but was rather one of a number of
factors leading the federal government to support it).
72 COMM. ON EMP’R-BASED HEALTH BENEFITS, INST. OF MED., EMPLOYMENT AND HEALTH
BENEFITS: A CONNECTION AT RISK 70-71 (Marilyn J. Field & Harold T. Shapiro eds., 1993),
https://www.ncbi.nlm.nih.gov/books/NBK235989 (detailing the birth of employer-sponsored
health insurance); JOST, supra note 55, at 77-80 (describing the events that lead to the rapid
growth of employer-sponsored health insurance); STARR, supra note 62, at 311.
73 See JOST, supra note 55, at 77-79.
74 For a thorough discussion of the role of labor unions in the growth of employer-sponsored
health insurance, see JOST, supra note 71, at 62-64.
75 See STARR, supra note 62, at 311-13.
76 See JOST, supra note 55, at 79.
77 See Nicole Huberfeld & Jessica L. Roberts, Health Care and the Myth of Self-Reliance, 57
B.C. L. REV. 1, 16-17 (2016) (detailing the “hidden” subsidy of tax benefits for employersponsored health insurance benefits).
78 But see id. at 18 (explaining how the CBO values this subsidy).
79 JESSICA C. BARNETT & MARINA S. VORNOVITSKY, U.S. CENSUS BUREAU, HEALTH
INSURANCE COVERAGE IN THE UNITED STATES: 2015, at 4 (2016),
https://www.census.gov/content/dam/Census/library/publications/2016/demo/p60-257.pdf.

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Ongoing medical access failures led Congress to enact the Social Security
Act Amendments of 1950, which provided federal grants-in-aid to states in the
form of vendor payments, which were capped payments for specific services
such as hospital, skilled nursing, and physician care. 80 The legislation
delegated payment delivery to states and contained few requirements other than
specifying which health care providers could be paid with federal money,
allowing states and localities to vary widely in their use of the funding.81 Even
though vendor payments offered cost-shifting to the federal government while
reinforcing the state role in medical services, many states resisted participating,
in part because vendor payments were available only for individuals receiving
welfare benefits. But increased federal funding improved participation over
time. 82 With medical care tied to welfare administration, stigmatization of the
medically needy population was virtually automatic. 83
Congress’s next notable intervention was the Kerr-Mills Act of 1960,
which offered the states additional money and included funding for elderly who
were “medically indigent” at a matching rate rather than a capped allocation. 84
The Kerr-Mills Act continued the connection between welfare and medical
payments for non-elderly indigent individuals, allowing states to determine
eligibility and coverage. 85 In sum, Kerr-Mills offered incremental reform with
more federal money and some federal standard setting, staving off grander
federal intervention while preserving states’ role in health care. 86 States were in
a slightly better economic position for the existence of Kerr-Mills, but wide
variation in state implementation led to confusion, inconsistencies, and
disparities in coverage and care, and state cost-shifting to the federal
government in ways unintended by the law. 87 Further, even though wealthier
80

Social Security Act Amendments of 1950, Pub. L. No. 81-734, Title III, 64 Stat. 477, 54858 (codified as amended at 42 U.S.C. §§ 301, 302, 306 (2016)) (repealed 1974).
81 See STEVENS & STEVENS, supra note 60, at 23-24 (describing state “variations” in
implementing vendor payments).
82 See Judith D. Moore & David G. Smith, Legislating Medicaid: Considering Medicaid and
Its Origins, HEALTH CARE FINANCING REV., Winter 2005-2006, at 45, 45-46 (describing how
vendor payments were augmented by the federal government through the 1950s, which
increased state uptake).
83 See SMITH & MOORE, supra note 64, at 30.
84 See Kerr-Mills Social Security Act, Pub. L. No. 86-778, § 707, 74 Stat. 924, 995-97
(1960) (codified as amended in scattered sections of 42 U.S.C.); Moore & Smith, supra note
82, at 46 (“A most important innovation in the Kerr-Mills Act was to extend medical
benefits to a new category generally known as the medically indigent.”).
85 See Kerr-Mills Act Social Security Act § 707, 74 Stat. at 995-97; SMITH & MOORE, supra
note 64, at 31.
86 See Huberfeld, supra note 61, at 443-44.
87 SUBCOMM. ON HEALTH OF THE ELDERLY, SPECIAL COMM. ON AGING, MEDICAL ASSISTANCE
FOR THE AGED: THE KERR-MILLS PROGRAM 1960-1963, S. Rep. 22-449, at 1 (1963),

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and heavily industrialized states were eager to take advantage of federal
funds—New York, California, and Massachusetts accounted for more than half
of enrollees—many poorer states were reluctant to participate. 88
Poor states needed more funding for healthcare, but some did not have the
necessary matching funds of their own to afford the federal assistance. 89 Many
of these states—especially in the South—also had particular anxieties about
federal intervention in areas involving both the family and minority
populations. 90 This led those states to resist federal funding outright or to allow
only limited participation, 91 and, with later federal reforms, to insist on
structures that gave states control over their minority populations. This
combination of distrust, conservative values, and racism also led states to
demand a continued role for themselves in managing the federal distributions
and preserving the political economy of the region. 92 It further allowed for less
https://www.aging.senate.gov/imo/media/doc/reports/rpt263.pdf (giving a harsh assessment
of Kerr-Mills’ failure to assist the elderly shortly after enactment).
88 See Moore & Smith, supra note 82, at 46-47.
89 See id. (noting poorer states were stingy with welfare, which carried over to medical
welfare); see also STARR, supra note 62, at 368-70 (laying out historical developments
before Medicaid and noting that the most industrialized states were most likely to participate
in federal funding).
90 See Timothy Stoltzfus Jost, Remarks at the Medicare and Medicaid at 50 Conference at
Yale Law School 6-7 (Nov. 7, 2014) (transcript on file with authors) (detailing racist
motivations for Southern states to resist Medicaid’s public health insurance for the poor at its
inception and throughout Medicaid’s history). Opposition to national health insurance and
other national benefits was rooted in part in racism and the Southern drive for cheap
agricultural labor, meaning that Southern states were fearful that the federal government
would use national health programs as a tool to desegregate. In fact, Medicaid’s devolution
to states to determine eligibility and benefit levels can be directly traced to Senator Byrd’s
efforts to defeat any possible federal interjection into “the Negro question.” See SMITH &
MOORE, supra note 67, at 10 (discussing race as part of the reason that efforts to instill
national health insurance have failed). And, part of the reason that Medicaid contains the
very specific EPSDT requirement of a “comprehensive unclothed physical exam,” see 42
U.S.C. §1396d(r)(1)(B)(ii), is that Southern doctors would not have touched AfricanAmerican children without a federal rule telling them otherwise; when the Reagan
Administration tried to remove this requirement in 1981, the director of EPSDT from
Mississippi’s Medicaid agency demanded that it remain for fear that “doctors [would] stop
taking clothes off Black children to examine them,” Email from Sara Rosenbaum, Professor
of Health Law and Policy, George Washington Univ. School of Public Health, to Nicole
Huberfeld, Professor of Health Law, Ethics & Human Rights, Bos. Univ. Sch. of Public
Health and Sch. of Law (Aug. 25, 2017, 2:08 PM EDT) (on file with authors).
91 See SMITH & MOORE, supra note 64, at 40 (noting that states in the South, the Southwest,
and those with “rural or sparsely populated areas” were holdouts). After five years, ten states
still opted out, and three states had authorized use of federal funds but had not allocated state
funds required for the federal match. See Moore & Smith, supra note 82, at 47.
92 See SUZANNE METTLER, DIVIDING CITIZENS: GENDER AND FEDERALISM IN NEW DEAL
PUBLIC POLICY 61 (1998).

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What Is Federalism in Health Care For?
70 STAN. L. REV. XXX (2018)
aggressive implementation by some states less eager to assist minority
populations, 93 entrenching interstate coverage disparities.
By the early 1960s, it was clear that more help was needed beyond existing
state assistance for needy populations. 94 First introduced by President
Kennedy, and enacted under the Johnson Administration’s War on Poverty in
1965, Medicare offered a radically different approach for the elderly with a
fully nationalized program for all elderly designed to offer what was then
comprehensive health insurance (hospital and physician care, not just one or
the other). 95 It was to be funded and administered entirely by the federal
government with no role preserved for states. 96 This shift to a totally
federalized scheme resulted in part from successful lobbying by the elderly,
who did not want their access to medical care to fluctuate depending on the
economic whims and welfare biases of the states. 97 But also, Medicare was
enacted as a federal program because states did not want to be responsible for
elderly medical needs, evidenced in part by slow uptake of prior programs. 98

93

See id. at 75.
Another example of incremental federal intervention was the 1964 law that allowed
creation of community health centers as demonstration projects, see Economic Opportunity
Act of 1964, Pub. L. No. 88-452, 78 Stat. 508, 518 which became a permanent feature of the
federal health care landscape in 1975, see Special Health Revenue Sharing Act of 1975, Pub.
L. No. 94-63, tit. 1, 89 Stat. 304. Community health centers were part of a larger federal War
on Poverty and remain a key feature of care for low income populations today. See generally
SARA ROSENBAUM ET AL., KAISER COMM’N ON MEDICAID & THE UNINSURED, COMMUNITY
HEALTH CENTERS IN AN ERA OF HEALTH SYSTEM REFORM AND ECONOMIC DOWNTURN:
PROSPECTS AND CHALLENGES (2009),
https://kaiserfamilyfoundation.files.wordpress.com/2013/01/7876.pdf (detailing the legacy
and ongoing central role of community health centers in the healthcare system).
95 See STEVENS & STEVENS, supra note 60, at 46-49.
96 See SMITH & MOORE, supra note 64, at 47, 52. See generally 42 U.S.C. §§ 1395-1395lll
(2016) (codifying Medicare).
97According to one presidential historian, Kennedy was “indignant that government officials
like him received much better care than the average American. He acidly noted in private
that his predecessor [Eisenhower] would deride the notion of government-sponsored care for
older Americans as socialized medicine before ‘getting into his limousine’ to enjoy free
treatment at [Walter Reed Medical Center].” Michael Beschloss, After Health Bill’s Defeat,
What Trump Can Learn from L.B.J., N.Y. TIMES (Mar. 31, 2017),
https://www.nytimes.com/2017/03/31/business/trump-health-care-lyndon-johnsonmedicare.html.
98 See SMITH & MOORE, supra note 64, at 41 (noting that “many states were too poor or
unwilling . . . to put up matching funds” for Old Age Assistance and other medical welfare
programs that predated Medicaid); STEVENS & STEVENS, supra note 60, at 30-33 (arguing
that although Kerr-Mills was a way to shift the “burden of that aid from others to the federal
government,” the “states responded slowly to the new program”).
94

20

What Is Federalism in Health Care For?
70 STAN. L. REV. XXX (2018)
The push for nationalization did not extend to the nonelderly poor. 99
Although the Medicaid Act was enacted with the same pen stroke as Medicare,
Medicaid was structured differently, offering federal funding and statutory
baselines while continuing shared state financing and a state-driven, welfarebased approach to health care that encoded a philosophy of aiding only the
“deserving poor” 100—and keeping state control over those populations—that
continued until the ACA. 101 Medicaid was not part of the political push for
Great Society programs that resulted in a uniform social safety net for the
elderly. Instead, as a last minute practical compromise, Representative Mills
proposed that Kerr-Mills be extended and expanded to influence states to cover
welfare populations such as the blind, disabled, young children, and their
parents 102—in other words, the very same populations that had been deemed
“worthy” of government assistance since the colonial era. 103 Thus, the
distinction between social insurance and welfare that was originally encoded in
the first Social Security Act was carried through into the statutory principles
that underlie the differences between Medicare and Medicaid (and are still
being debated today). 104
Medicare has been modified from time to time, for example covering the
permanently disabled in 1972, 105 or adding a major drug benefit in 2003, 106 but
it tends to avoid the same kind of frequent tinkering seen elsewhere in health
care law. On the other hand, Medicaid has seen much more significant
modification over time, often reflecting the larger pattern of federal
incremental intervention where state governance is failing. For example,
Medicaid has been amended to increase coverage categories and financial
99 See PAUL E. PETERSON, THE PRICE OF FEDERALISM 27-34 (1995) (arguing that because
state governments have pressures to avoid redistribution, those kinds of reforms focused on
the poor are better suited to the national government). Medicare and Medicaid have always
been linked for poor elderly who cannot pay out-of-pocket costs. Thanks to Sara Rosenbaum
for this insight.
100 See Huberfeld, supra note 64, at 436-46.
101 See Jost, supra note 90 (discussing this progression and the link between state control of
health care and continued limitations on serving all of the poor).
102 See LAURA KATZ OLSON, THE POLITICS OF MEDICAID 24-25 (2010) (describing Mills’
three-part plan for reform, with Medicaid building on Kerr-Mills).
103 See Huberfeld, supra note 61, at 439-40.
104 See Jost, supra note 90. See generally Nicole Huberfeld, The Universality of Medicaid at
Fifty, 15 YALE J. HEALTH POL’Y, L., & ETHICS 67 (2015) (exploring the historically
exclusionary approach to U.S. health care).
105 Social Security Amendments of 1972, Pub. L. No. 92-603, tit. ii, § 201(a)(3), 86 Stat.
1329, 1371, reprinted in 42 U.S.C. § 1395j app. at 2591 (2016).
106 Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L.
No. 108-173, § 101, 117 Stat. 2066, 2071-152 (codified as amended at 42 U.S.C. § 1395w101 (2016)).

21

What Is Federalism in Health Care For?
70 STAN. L. REV. XXX (2018)
eligibility levels over time. In the 1980s, for instance, eligibility was expanded
to cover all children up to age eighteen and children up to age six at even
higher levels of financial eligibility. 107 Also, in 1989, the singular EPSDT
benefit (which ensures uniform, comprehensive medical benefits for children)
was made mandatory for states, though it had been optional since 1967. 108 In
each instance, the federal government was stepping in where states failed to
serve certain populations’ medical needs. Medicaid was decoupled from
welfare in the 1990s after President Clinton’s health care reform failed and the
Gingrich plan for block grants was defeated, a legislative change that
unenrolled vulnerable people (but that also set the stage for the ACA’s
expansion to all of the nation’s poor in 2010). 109 Further, Medicaid laid both a
foundation and acted as a foil for the State Children’s Health Insurance
Program of 1997 (then “SCHIP,” now “CHIP”), a federal block grant that
allows states to subsidize coverage for children at higher financial eligibility
levels than Medicaid after the Clinton health plan failed to create comprehensive coverage in 1994. 110
Every president from Theodore Roosevelt to Barack Obama tried to
expand health care access. 111 After Medicare and Medicaid, in the early 1970s,
107

See SMITH & MOORE, supra note 64, at 133-36; Nicole Huberfeld et al., Plunging into
Endless Difficulties: Medicaid and Coercion in National Federation of Independent Business
v. Sebelius, 93 B.U. L. REV. 1, 20...

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