Over the last five decades the initially negligible Medicaid program has emerged as the fifth costliest item on the U.S. budget and the second largest one on most state budgets. The fact that it originated in 1965 to provide medical assistance to the poor, a stepchild of the more middle-class oriented Medicare plan for the aged, renders the extreme growth of the program even more remarkable. In this carefully researched, thought-provoking book, Frank J. Thomas addresses the issue of why Medicaid has not only endured but has expanded so appreciably. In order to understand the dynamics of Medicaid’s improbable durability he focuses on the period between 1993 and 2010, encompassing both the Bill Clinton and George W. Bush presidencies.

In the first chapter, Thompson describes the two other major pillars of America’s health insurance system—the employer-based system and Medicare—and their effect on Medicaid policies and politics. He then highlights the main features of the program, assessing its major beneficiaries, available benefits, access to care, and the complicated intergovernmental structures that both constrain and expedite the program’s steady improvement.

Chapter two concentrates on several crucial indicators of Medicaid’s durability and strength during the period under study. The author shows how it survived two Republican attempts to simultaneously turn the program into a block grant and curtail federal financial support. Indeed, the states achieved enhanced central government funding during the economic downturns. Moreover, Medicaid generally flourished as measured by trends in spending per poor person and number of enrollees per poor person, both of which expanded.

The heart of the book is the analysis of the forces that have contributed to Medicaid’s resiliency, which is covered in the ensuing chapters. A critical factor, evaluated in chapter three, has been the movement from a program mostly serving the poor to one that has increasingly included working class and middle-income beneficiaries. For example, the de-linkage of cash assistance (AFDC) from Medicaid in the 1990s and the coverage of children from families with higher incomes (SCHIP) have upgraded the image of the program and thus its political support. Thompson also points out that means-tested programs are susceptible to subterranean erosion because of their complicated eligibility mechanisms. In the case of Medicaid, there are a number of challenges, such as documentation and recertification requirements, that interfere with enrollment. Functioning as what Thompson aptly terms “termites in the foundation,” they potentially can weaken the program’s growth.

One of the more groundbreaking contributions of Medicaid Politics is the thoughtful assessment of the role of waivers, covered in the next two chapters. These waivers proliferated under the Clinton and Bush administrations, allowing state officials greater flexibility to shape their Medicaid plans. As Thompson points out in chapter 4, Section 1915c waivers have fostered an expansion of the more appealing home-based services relative to nursing home care and, in turn, encouraged enrollments by people with middle-class backgrounds: the frail elderly, incapacitated adults under age 65, intellectually and physically disabled children, accident victims, the mentally ill, and people with AIDS. Medicaid garnered more support because of these additional beneficiaries, along with greater backing from state leaders who appreciated that their new powers over the program did not come at the expense of fewer federal dollars. Thompson writes, “In essence, Medicaid demonstration waivers have bolstered the program’s durability by providing an administrative outlet for pressure from states—especially from governors—for greater flexibility” (p. 164).

In chapter 5, however, the author also shows how waivers, together with the Deficit Reduction Act of 2005, were used both to enhance Medicaid and to undercut legal entitlement to the program. Section 1115 waivers, for instance, allowed enrollment caps, waiting lists, the targeting of beneficiary groups, benefit reductions and other undesirable revisions. State officials also embedded market reforms into their programs, such as managed care, premiums and cost-sharing provisions or, in the case of Vermont and Rhode Island, back door block grants. At the same time, eligibility was expanded in a large number of states, as well as other improvements. The author perceptively notes that despite the rationing that took place during the period under study, the growth in both enrollments and federal financing attest to the fact that Medicaid has become, in part, a financial entitlement for the states.

With its interesting insights on the Affordable Care Act (ACA), chapter 6 is a major contribution toward understanding and explaining why, given the other options available, congressional Democrats relied on Medicaid as a main vehicle for achieving near-universal health insurance coverage. The Congressional Budget Office (CBO) tally of overall costs was a major factor since the Obama administration had been insistent that ACA not add to the deficit. We also learn that CBO scoring concerns shaped how high the Medicaid eligibility line would be drawn.

The text highlights other key provisions of the ACA and some of its future challenges, including those faced because of the Supreme Court decision that allowed states to opt out of the Medicaid expansion. To this end, Thompson presents two short case studies of Texas and Florida, states that were supposed to insure nearly 20 percent of the households scheduled to gain coverage through the broadening of Medicaid. He concludes that, “the political characteristics, health care track records, and Medicaid legacies of Texas and Florida suggest that they will severely impede efforts to expand insurance coverage for people up to 133 percent of the poverty line” (p. 197). Since Medicaid Politics was published in 2012, the author could only speculate on the full extent of the court’s ruling; as of September 2014, twenty-four states have not implemented the expansion, leaving a significant number of American citizens medically uninsured.

We gain an appreciation of the enduring implementation issues as well, such as access to doctors, especially the shortage of specialists, the low (but improving) Medicaid participation rates, and pressures on state budgets. Another concern is the several ways in which ACA may, in fact, undermine Medicaid. For example, the loss of a significant number of the program’s working participants to the state exchanges has the potential to adversely affect its future support and durability. Likewise, Thompson calls our attention to ACA’s numerous state mandates that may provoke Republican governors to once again clamor for block grants. Despite the caveats, Thompson ultimately determines that ACA testifies to Medicaid’s prominence and political strength.

The final chapter returns to the main forces that have fortified Medicaid from 1993 through 2010. He zeros in on the intriguing questions that are probed throughout the volume, such as the program’s funding formula that fuels costs by enticing the national and state governments to shift financial burdens between each other; the increasingly positive social construction of Medicaid beneficiaries; the many powerful commercial stakeholders and social welfare advocates; the strength of the intergovernmental lobby, particularly governors; and the role of waivers, mostly through executive action, that promote state flexibility. According to Thompson, these dynamics corroborate the catalytic model of federalism. That is, the interplay between the central government and the states has served to expand government overall and frequently to promote larger outlays for redistributive social programs such as Medicaid.

Medicaid Politics offers readers a detailed study of what has driven Medicaid policies during a specific span of time—most prominently the influences on its durability. This well-documented text will serve as a foundation for future assessments of ACA, and its Medicaid component, as they evolve over the next several years. It also will add to ongoing debates about federalism as well as the growth of executive administrative power, as suggested by Thompson’s evaluation of waivers. It is an important book that should be widely read.