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.