Conventional wisdom holds that programs for the poor are vulnerable to instability and retrenchment. Medicaid, however, has grown into the nation’s largest intergovernmental grant program, accounting for nearly half of all federal funding to state and local governments. Medicaid’s generous open-ended federal matching grants have given governors a powerful incentive to mobilize on behalf of its maintenance and expansion, using methods ranging from lobbying and negotiation to creative financing mechanisms and waivers to maximize federal financial assistance. Perceiving federal retrenchment efforts as a threat to states’ finances, governors, through the powerful National Governors’ Association, have repeatedly worked together in bipartisan fashion to defend the program against cutbacks.

Financing Medicaid engagingly intertwines theory, historical narrative, and case studies, drawing on sources including archival materials from the National Governors’ Association and gubernatorial and presidential libraries, Centers for Medicare and Medicaid Services data, the Congressional Record, and interviews.

With the defeat of national health reform, many liberals have looked to the states as the source of health policy innovation. At the same time, many in the new Republican majority and several governors also support increased state control. In contrast, Michael S. Sparer convincingly argues that states by themselves can neither satisfy the liberal hope for universal coverage nor the conservative hope for cost containment. He also points to two critical drawbacks to a state-dominated health care system: the variation in coverage among states and the intergovernmental tension that would inevitably accompany such a change.

Supporting his arguments, Sparer analyzes the contradictions in operations and policies between the New York and California Medicaid programs. For instance, why does New York spend an average of $7,286 on its Medicaid beneficiaries and California an average of $2,801? The answer, the author suggests, is rooted in bureaucratic politics. California officials enjoy significant bureaucratic autonomy, while the system in New York is fragmented, decentralized, and interest-group dominated. The book supports this conclusion by exploring nursing home and home care policy, hospital care policy, and managed care policy in the two states. Sparer's dissection of the consequences of state-based reform make a persuasive case for national health insurance.

Poor People’s Medicine is a detailed history of Medicaid since its beginning in 1965. Federally aided and state-operated, Medicaid is the single most important source of medical care for the poorest citizens of the United States. From acute hospitalization to long-term nursing-home care, the nation’s Medicaid programs pay virtually the entire cost of physician treatment, medical equipment, and prescription pharmaceuticals for the millions of Americans who fall within government-mandated eligibility guidelines. The product of four decades of contention over the role of government in the provision of health care, some of today’s Medicaid programs are equal to private health plans in offering coordinated, high-quality medical care, while others offer little more than bare-bones coverage to their impoverished beneficiaries.

Starting with a brief overview of the history of charity medical care, Jonathan Engel presents the debates surrounding Medicaid’s creation and the compromises struck to allow federal funding of the nascent programs. He traces the development of Medicaid through the decades, as various states attempted to both enlarge the programs and more finely tailor them to their intended targets. At the same time, he describes how these new programs affected existing institutions and initiatives such as public hospitals, community clinics, and private pro bono clinical efforts. Along the way, Engel recounts the many political battles waged over Medicaid, particularly in relation to larger discussions about comprehensive health care and social welfare reform. Poor People’s Medicine is an invaluable resource for understanding the evolution and present state of programs to deliver health care to America’s poor.