Financing Medicaid: Federalism and the Growth of America's Health Care Safety Net
University of Michigan Press

Shanna Rose

Medicaid has evolved over the past five decades from a tiny “welfare medicine” program into the single largest health insurance program in the United States. Contrary to the conventional wisdom that programs for the poor are vulnerable to instability and retrenchment because they lack a powerful constituency, This book finds that, as a result of its unique institutional structure, Medicaid does, in fact, have an organized, influential interest group: the nation’s governors. Although governors routinely criticize Medicaid for its mounting cost to the states, they have found it difficult to resist the powerful expansionary incentives created by the program’s open-ended federal matching grants. Throughout the program’s history, state leaders have used a variety of methods ranging from lobbying and negotiation to creative financing mechanisms and waivers to maximize federal aid, thereby fueling Medicaid’s growth. And, perceiving federal retrenchment efforts as a threat to their states’ financial interests, the governors have repeatedly worked together in bipartisan fashion to defend the program against cutbacks. Indeed, Rose argues, Medicaid has been a driving force behind the mobilization of the intergovernmental lobby, and specifically the National Governors Association—one of the most powerful interest groups in Washington. Financing Medicaid intertwines theory, historical narrative, and case studies, drawing on a variety of sources including archival materials from gubernatorial and presidential libraries and the National Governors Association.