Medicaid Access & State Flexibility: Negotiating Federalism
102 Pages Posted: 21 Oct 2017 Last revised: 22 Oct 2017
Date Written: October 20, 2017
Medicaid is a persistent target of federalism-based accusations that the federal government is infringing states’ sovereignty in the area of health care. Such claims have been used to advance policy proposals to radically reduce Medicaid funding and roll back entitlements, in the name of protecting state power and increasing state flexibility. Such claims have also played a prominent role in legal disputes over Medicaid administration as states push for the elimination or curtailment of private rights enforcement of federal spending conditions. The stakes are high in both instances. And for both, we need to move past simplistic and outdated accounts of federalism that treat federal power as an inherent threat to state authority and states as passive recipients of burdensome federal mandates imposed from on high. This view is inconsistent with the modern reality of the federal-state relationship in Medicaid as one that is often negotiated, dynamic, and in which states are powerful, if not equal, partners.
This more modern federalism account has two implications. In the legal arena, it provides useful context for understanding the Supreme Court’s recent decisions around preemption–based enforcement of federal spending conditions. The decisions arose out of challenges to state Medicaid rate setting, an area of Medicaid administration in which we see negotiated or dynamic federalism constantly at work. The Court’s rate-setting decisions reflect a nuanced approach to determining the availability of equitable relief from state violations of spending conditions – one that exhibits a deep respect for state flexibility consistent with federal program goals, while also affirming the importance of private enforcement of certain Medicaid protections. A modern understanding of the federal-state relationship in Medicaid shows why this balanced approach – as opposed to the wholesale rejection of rights enforcement advanced by the states – is more faithful to the legislative balance struck in the Medicaid statute. In the policy arena, this modern insight supports preserving this balance. The negotiated federalism model undermines claims that a dramatic rollback of Medicaid entitlements and block granting funds are necessary or even effective for achieving greater state flexibility. Indeed, such proposals would create de facto constraints on state power that would reduce flexibility in areas of state discretion, while threatening essential access guarantees that for decades have been understood to be non-negotiable.
Keywords: Medicaid, Federalism, Health Care, Preemption, Supremacy Clause
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