Health Care Federalism

It’s no surprise that in the wake of what happened in Massachusetts, legislators in other blue states like California are looking at implementing their own state-based universal health care plans.

There are, however, a couple of logistical problems with this. One is that state governments can’t go into deficit during a recession. Which means you’re always going to have a big challenge anytime there’s a downturn. In principle, very responsible management of rainy day funds could make it work, but it’d be hard. The other thing is that in any American state a huge chunk of health care spending happens through Medicare, which is entirely outside of state jurisdiction. That’s not an insurmountable obstacle (Massachusetts forged ahead, after all) but but it means that anything you put together would be intrinsically a bit odd.