Historically, states and localities were the primary providers of healthcare and safety net programs for citizens. Following the Great Depression, however, the federal government assumed greater responsibility through the creation of Social Security, Medicaid, and Medicare. But the emergence of greater federal involvement did not permanently remove policymaking power from the states.
The devolution revolution of the 1980s precipitated a major shift in social policy. No longer was the federal government the primary actor in determining and distributing benefits. States and localities once again became the primary authorities in regard to the provision of health and welfare benefits. While the states welcomed the increase in policy flexibility, the rising costs of healthcare and welfare put undo constraints on state budgets. As a result, states and localities were forced to become more creative in social policy design and implementation. Although Medicaid continues to place an enormous fiscal burden on states, programs such as SCHIP and TANF have proved successful in terms of appropriately expanding benefits while also reducing caseloads. States continue to serve as the primary distributors of social service benefits, but decreasing federal support, faltering state economies, and the increasing need to provide long-term care to healthcare recipients are placing overwhelming burdens on states to maintain and expand existing programs. Even after passage of federal healthcare reform legislation in March 2010, states will still be at the center of healthcare expansion in the United States. After the U.S. Supreme Court’s June 2012 ruling, states get to decide whether to expand Medicaid under the law. At stake in these choices are many billions of dollars and health insurance for millions of Americans.