In Obamacare, Congress made the states an offer it thought they couldn't refuse: If they expanded their Medicaid systems to include residents with incomes up to 138 percent of the poverty rate, Washington would pick up 100 percent of the tab for the first three years. And any state that didn't go along would see its federal Medicaid dollars eliminated entirely.
When the Supreme Court upheld the Affordable Care Act in 2012, it held that Congress could not punish states so severely for failing to enact federal legislators' preferred policies. (Medicaid composes the largest part of most state budgets, and the federal government automatically picks up 50 to 83 percent of each state's Medicaid spending, no matter how much they choose to spend.) Nevertheless, about half of the states have gone along. This can be seen as the last step toward making the states nothing more than administrative units of the federal government, completing a process that began a century ago.
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