Development of Federalism and its Impact on Health Care

Federalism in the first century of U.S. history is often described as dual, with clear distinctions between the spheres of activity of state and national government. Competition between the two levels was chiefly over economic development and regulation (Ladenheim, 1999). Critiquing the notion that this period was marked by competing or separated federal and state powers, Grodzins and Elazar have pointed out that even in this early period federal relationships were marked by partnership and cooperation. While there were few intergovernmental grants before the Civil War, the governments cooperated in establishing new territories and the transportation needed to open and exploit the new lands. At the same time, financial transfers betweens governments--so much a part of contemporary federalism--were virtually nonexistent. While some land grants were provided to the states, they were quite limited (Ladenheim, 1999).

Federalism in the United States has evolved quite a bit since it was first implemented in 1787. In that time, two major kinds of federalism have dominated political theory.

The first, dual federalism, holds that the federal government and the state governments are co-equals, each sovereign. In this theory, parts of the Constitution are interpreted very narrowly, such as the10th Amendment, the Supremacy Clause, the Necessary and Proper Clause, and the Commerce Clause (Mount, 2010). In this narrow interpretation, the federal government has jurisdiction only if the Constitution clearly grants such. In this case, there is a very large group of powers belonging to the states, and the federal government is limited to only those powers explicitly listed in the Constitution.
The second, cooperative federalism, asserts that the national government is supreme over the states, and the 10th Amendment, the Supremacy Clause, the Necessary and Proper Clause, and the Commerce Clause have entirely different meaning. A good illustration of the wide interpretation of these parts of the Constitution is exemplified by the Necessary and Proper Clause's other common name: the Elastic Clause.

Dual federalism is not completely dead, but for the most part, the United States' branches of government operate under the presumption of a cooperative federalism. The shift from dual to cooperative was a slow one, but it was steady (Mount, 2010).
One of the earliest examples of a shift was in the Supreme Court's Gibbons v. Ogden decision, which ruled in 1824 that Congress's right to regulate commerce under the Commerce Clause could be "exercised to its utmost extent, and acknowledges no limitations, other than those prescribed in the constitution..." The Court did not expand the powers of the national government much over the next century. But in the 1930's, a wave of feeling of social injustice began to sweep the nation as the Depression began. Federal laws concerning labor, civil rights, and civil liberties began to take on a new priority (Mount, 2010). National laws, and amendments to the Constitution, have taken away many powers from the states, such as the ability to significantly restrict voting rights or the ability to draw political districts at the whim of political party bosses.

Some advocate a return to an emphasis on dual federalism as a returning of power to a government closer to the people, and hence under better popular control. There are many problems with this, however, as many states found in the Reagan era. President Reagan was a strong advocate of states rights, and wanted to return many of the powers taken up by the federal government to the states. But in many cases, this created more bureaucracy, as each of the 50 states had to establish offices to administer programs the federal government handed over(Mount, 2010). Worse, the transition was often unfunded, meaning that the costs of the programs were shifted to the states, but federal taxes were not reduced accordingly, leading to a higher tax burden on the people as states raised taxes to fund the programs. Worse, when federal taxes were cut, federal aid to the states that did exist was cut as well