ABSTRACT
This chapter discusses the costs and benefits of vesting control over public health care in each of the distinctly different partners in the federalist system—state governments and the federal government. It aims to discuss some of the general attributes affecting the choice of institutional structure in which to grant general responsibility for health care policy. The chapter examines the criteria for judging whether a publicly provided good should be provided by the federal government or by the states. It analyses the theoretical discussion by an empirical examination of state government behavior in solving insurance problems and in resolving redistributive issues. The chapter utilises State government policy choices in income redistribution programs to provide insight into the health care access debate. It provides a glance at the tendency of states to conduct a “race to the bottom.” The chapter highlights important ways in which federal policy guidance is necessary to successfully implement state-directed health care policy.
