Abstract

In the United States, decentralization of policy implementation is often touted as a benefit of federalism. But in this study, we argue that granting states leeway when it comes to policy implementation can result in systematic and marked inequalities across different populations. We use health care policy implementation as a case study of how state discretion can lead to persistent racial inequalities in insurance coverage. Using a triple difference approach, we examine the effects of different state choices in implementation of the Affordable Care Act on subsequent insurance rates for White, Black, and Latinx people. States were given a menu of implementation choices under the ACA, and we found that regardless of their decisions, the passage of the ACA did indeed improve insurance rates for working age adults in each of the three groups. Different implementation strategies, however, had notably different effects on rates across the three groups. Whites generally disproportionately benefitted from each decision relative to Blacks and Latinx individuals, and the biggest gains for all groups were in states that adopted early policy innovations or chose a state-run health exchange coupled with a Medicaid expansion.