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Health Care Federalism


Ramesh, on health care federalism, the path some conservatives have lately chosen for allowing the purchase of insurance across state lines is precisely to deregulate at the federal level. The Enzi bill last year would have done this through an “optional federal charter,” rather than, as you put it, “letting people choose which state’s regulatory regime they want to operate under.” That’s in part because advocates of this approach think a national market would be more efficient, and in part because they think the “choose your state” approach of the original Shadegg bill (which I gather is what you had in mind) would be extremely difficult to manage. They have a point, though some conservatives (myself included, and I gather you too) still support the Shadegg concept in principle, and it is of course an example of health care federalism. It’s still not quite like federalism in corporate law, which has to do with where a corporation chooses to base itself (and therefore where it pays taxes, etc.). It’s much more complicated than that. But it’s one form of health care federalism. So I guess my point on that front is that I wasn’t talking about the Shadegg bill (or its supporters).

On your second point, Capretta and I were discussing giving states the freedom to transform their Medicaid funds into vouchers to purchase private insurance coverage (as Jeb Bush’s reform in Florida did, and as the Massachusetts plan did in part). That approach actually gives states more control over their Medicaid budgets and begins to point away from the fee-for-service approach that has made the program such a mess. Medicaid regulations stood in the way of such reforms, and giving the states some flexibility helped eliminate those obstacles. It would certainly be better if the states paid for all reforms themselves, but I’m not sure that means that allowing them to experiment with Medicaid waivers is not federalism. Transforming Medicaid funds into a block grant more generally would be even better. Romney (and others) have proposed that, but we’ll need a rather different Congress to get there.

So I wasn’t classifying interstate freedom of commerce as anti-federalist; and I do think Medicaid waivers can advance the cause of federalism.