ABSTRACT
The devolution of Medicaid as a sustained process began in earnest with the Ronald Reagan administration and Omnibus Budget Reconciliation Act of 1981 (OBRA'81); but some antecedent developments are of interest, both to establish a baseline and to understand why and how devolution occurred. Medicaid experience with managed care prior to OBRA'81 was mixed. In general, urban poverty agencies did much better by starting local managed care plans for welfare recipients. In 1980, the Medicaid Community Care Act, introduced by Representative. Henry Waxman renewed support for this objective, broadening it to include developmental disability and mental illness. The inclusion of a Section 1115 waiver authority as part of State Children's Health Insurance Program increased the likelihood that distributive issues would be devolved—settled at the state level. These waivers were used for food stamps and to extend Medicaid eligibility and benefits beyond the existing twelve-month period for welfare recipients returning to work.
