Federalism and the End of Obamacare

Federalism has become a watchword in the acrimonious debate over a possible replacement for the Affordable Care Act (ACA). Missing from that debate, however, is a theoretically grounded and empirically informed understanding of how best to allocate power between the federal government and the states. For health reform, the conventional arguments in favor of a national solution have little resonance: federal intervention will not avoid a race to the bottom, prevent externalities, or protect minority groups from state discrimination. Instead, federal action is necessary to overcome the states’ fiscal limitations: their inability to deficit-spend and the constraints that federal law places on their taxing authority. A more refined understanding of the functional justifications for federal action enables a crisp evaluation of the ACA—and of replacements that claim to return authority to the states.

Thus leads off the abstract for "Federalism and the End of Obamacare," Nicholas Bagley's essay from Feb. 14 in the Yale Law Review.

"The upshot of the piece," Bagley writes in an accompanying piece in The Incidental Economist, "is that there’s much to be said—more than the ACA’s supporters generally acknowledge—for returning power to the states."