Two Americas in Healthcare: Federalism and Wars Over Poverty from the New Deal-Great Society to Obamacare

Abstract

The Supreme Court’s decision sustaining the Affordable Care Act has inspired commentary applauding the Court for preserving the social safety net instituted and expanded during the New Deal and the Great Society. That narrative, as far as it goes, is accurate; but its double-edged meaning has not been fully understood until now, this Article shows. In exchange for the establishment and expansion of federal entitlement programs, Congress ceded to otherwise resistant states substantial control over the administration of federal programs, including Medicaid. Historically, officials in many states deployed administration discretion to police the boundaries of the "deserving" versus "undeserving" poor, to discriminate against minorities, and to stigmatize social welfare spending. The Chief Justice’s deft opinion in NFIB reinforced deference to the states — and the attendant costs described in this Article’s examination of the fraught socio-legal history of federal social welfare programs. In an unprecedented reading of the Spending Clause that privileged states’ decisional autonomy, the Court undermined Congress’s power to institute a truly national healthcare system through Medicaid. As a consequence of the Court’s analysis, states can opt out of the Medicaid expansion without fear of losing existing funding. Twenty-three states — including those with some of the highest poverty rates in the nation and thus the greatest need for Medicaid — did, in fact, opt out. The remarkable outcome of NFIB on the Medicaid expansion in states where some of the neediest Americans reside should temper any assessment that the Court preserved the New Deal-Great Society social contract. If NFIB affirmed the New Deal-Great Society contract, this Article shows, it shored up both the laudable and lamentable aspects of that legacy. The outcome perpetuated two Americas in healthcare.