Medicaid and the States

POSC 459 — Social Welfare Politics and Policy
Week 7 · Wednesday, October 7

Grogan and Andrews, "Medicaid" · Howard (2007), ch. 8 and ch. 5

Today

  1. How big is Medicaid?
  2. Grogan and Andrews: built to grow
  3. Howard ch. 5: Waxman's wedge
  4. Middle-class Medicaid
  5. Howard ch. 8: laboratories or cryogenic chambers?
  6. Pairs: two states, one statute

Guess the number

What share of U.S. births does Medicaid pay for?

What share of nursing-home residents?

What share of children?

1965: the afterthought

  • Medicare: the headline. Universal, for the old
  • Medicaid: the supplement. Means-tested, run by the states
  • Wilbur Mills's bet: cover the "worthy" poor and

"stave off claims for broader health-care coverage" (p. 339)

Three seeds of expansion

Seed What it lets a state do
Medical indigency Cover people who aren't poor but can't pay the bill
Comprehensive benefits Pay for nearly any service
A generous federal match Spend a dollar, get 50 to 75 cents back

Grogan and Andrews, p. 339

Then Waxman

Rep. Henry Waxman (D-CA), health subcommittee chair, 1979–1994
1984–87 Options: states may cover more pregnant women and children
1988–90 Mandates: states must
1990 All poor children under 18, phased in through 2002

"the Waxman wedge" (Howard, p. 103)

Sold as anything but welfare

Audience The pitch
Public health Fewer infant deaths
Business A healthier workforce
Abortion opponents More babies carried to term
Insurers Better than national health insurance

"an investment, not expense" (Howard, p. 104)

What it added up to

Before After
Births paid by Medicaid 17% (1985) 45% (1991)
Children covered 9 million (1980) 19 million (2000)
Spending $25 billion (1980) $200 billion (2000)

Howard, pp. 95, 98

The answers
Births in Arkansas and Oklahoma (2009) 64%
Nursing-home residents 70%
Children who get Medicaid services 60%
Americans covered 1 in 5

Grogan and Andrews, p. 343

Middle-class Medicaid

  • Nursing home: about $72,000 a year (2005)
  • Private payers at admission: two-thirds "spend down" onto Medicaid
  • 51% of Americans: a personal connection to Medicaid
  • No connection? Only 32% call it important

Grogan and Andrews, pp. 344–345

Front stage, backstage

Front stage: block grants, lawsuits

Backstage: take the match

ACA lawsuit, which states joined? Correlation with:

Governor's party Projected cost to the state
.8 .15

Grogan and Andrews, pp. 346–347, 350 n. 5

Medicaid, then (2013) and now

The chapter Now
ACA expansion Optional 40 states and DC in; 10 out
Enrollment 62 million (2009) 73.2 million (June 2026)
Seniors and disabled 25% of people, 65% of dollars 23% and 54%
Work requirement None 80 hours a month, expansion adults, 2027
Eligibility checks Yearly Every six months, expansion adults

KFF, Oct. 2026; CMS, June 2026 snapshot; Pub. L. 119-21 (2025)

Howard's question

Laboratories of democracy, or cryogenic chambers?

Howard 2007, ch. 8

The test case: workers' compensation

  • First social insurance program: 42 states by 1920
  • No federal money, no federal rules
  • $50 billion in benefits (2001), bigger than any means-tested program but Medicaid
  • Death benefit in Virginia: three times North Carolina's

Howard, pp. 154–155, 159

Why nobody fixed it

When Washington's choice
1935 Left it out of the Social Security Act
1956 Built disability insurance around it
1969–70 Black Lung; OSHA; a commission
1972 on Commission says fix it. Congress does nothing

"it already existed" (p. 167)

The one time the states moved

Average state score on the commission's 19 essential elements:

1972 1975 1980 1988 late 1990s
6.9 9.4 12.1 12.2 12.8

Howard, pp. 173–175

Two readings, two verdicts

Howard, ch. 8 Grogan and Andrews
Case Workers' comp Medicaid
Federal role None Match + mandates
States Frozen Pushed to expand
Who locks it in Insurers, employers, state boards Providers, enrollees, governors

Pairs: two states, one statute

Not expanded (10): AL · FL · GA · KS · MS · SC · TN · TX · WI · WY

Map: kff.org → Status of State Medicaid Expansion Decisions

  1. Pick one state that expanded and one that hasn't
  2. Same federal law, same 90% match. What explains the difference?
  3. Is the difference innovation or entrenchment?

Use one page from each reading.

8 minutes · then a show of hands

Show of hands

Laboratories or cryogenic chambers?

The smaller side goes first:

name a policy that supports the other side

Before you go
Fri 10/9 Source and claims memo, 11:59 p.m. Attach your conversation
Mon 10/12 Midterm review. Bring questions
Wed 10/14 Midterm, in class, by hand. Bring a blue book

By 2:15 you should be able to say

Medicaid grew because states could draw a federal match.

Workers' comp froze because nobody in Washington could make states move.

Federalism did both.