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Throughout American history, protecting states’ rights within federal health reform laws has served purposes other than the needs of the poor, such as excluding those deemed undeserving of assistance, the “able-bodied.” This chapter explores the role of federalism in health reform, paying particular attention to the importance of universality in programs meant to aid the poor, such as Medicaid. American federalism is dynamic, involving separate state negotiations with the federal government rather than the fixed dual sovereignty imagined by the Supreme Court. Such negotiations lead to variability, which in health care may lower the baseline for reform-resistant states and thus the nation as a whole. This is especially significant when the federal government attempts to improve conditions nationwide, as it did with the Affordable Care Act’s (ACA’s) universal health insurance coverage. The example of Medicaid expansion under the ACA demonstrates how state variability can improve coverage but also jeopardize it; keeping states in the picture sometimes results in restricting access to the safety net rather than strengthening it. The debates of the twentieth century about the role of government in health and who is deserving of aid are bound to repeatedly arise without fully gauging federalism’s mixed effects in health reform.
Congress has long had the power to spend for the general welfare as well as the authority to attach conditions that the recipient, whether state or individual, must accept to receive the funds. The Court's major decision regarding conditional spending, South Dakota v. Dole, focused on the federal–state relationship in setting forth a test for understanding the constitutional boundaries limiting Congress's ability to place conditions on funds. That benchmark facilitated a disconnect, however, that analytically separates the individual from the conditional spending program, a divide that allows Congress to impinge on individual rights when it could not otherwise do so.
An example of this disconnect is found in the Court's decisions allowing state and federal governments to burden the privacy right to obtain abortion by withholding funds in public health-care programs, particularly Medicaid. The import of programs such as Medicaid cannot be overstated, but using their power to blockade exercise of constitutionally protected rights demands consideration of the individual affected by the legislative conditions accepted by the state. This role of the third party is played not only by women, but also by physicians and other health-care providers who are most affected by conditions on spending. Together, they highlight the gap that exists between conditional spending jurisprudence and the impact conditional spending has on individuals participating in federal health-care programs (and sometimes individuals with private insurance).
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