Health care is usually a state’s second-largest spending area behind public education. The biggest health care issue for most states, given its impact on their budgets, is Medicaid, the cost of which is shared with the federal government, which created the program in 1965. States administer it subject to federal constraints and mandates.
The biggest problem in health care is pricing. Health care inflation has exceeded the general inflation in most years for decades because patients rely on others – Medicaid, Medicare, and private insurance – to pay their health bills. Private insurance (pre-paid health care) is a result of incentives created by the federal income tax code. Today, we don’t want to pay for health care ourselves because it’s so expensive, but it’s so expensive because we do not pay for health care ourselves.