A New Puzzle for Federalism: Different state responses to Medicaid and Food Stamps.

The two program analyses contained in this paper present evidence of state actions that might be deemed "irrational" or "counterintuitive" under major prevailing theories of state policy behavior. Rather than respond "rationally" to financial incentives to increase spending on food stamps, which is almost completely financed by the federal government, and limit spending on Medicaid, where states have significant financial responsibilities, most states appear to have made little effort to increase spending on food stamps and spent appreciable amounts of their own money on Medicaid outreach and enrollment simplification efforts whose avowed purpose is to increase Medicaid enrollment and expenditures even further. In similar fashion, states have not availed themselves of the discretion available to them under Medicaid to make themselves less attractive to potential low income residents and lower state taxes, thereby making themselves more attractive to wealthy residents and companies. Rather, they have rather broadly, though not universally, undertaken efforts to expand Medicaid enrollment that can be interpreted as a "race to the top" rather than in the other direction. In most cases, they have chosen to maintain these efforts under conditions of considerable budgetary stress. [ABSTRACT FROM AUTHOR]