The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy

The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy

The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy

The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy

Synopsis

Why are so many American social programs delegated to private actors? And what are the consequences for efficiency, accountability, and the well-being of beneficiaries? The Delegated Welfare State examines the development of the American welfare state through the lens of delegation: howpolicymakers have avoided direct governmental provision of benefits and services, turning to non-state actors for the governance of social programs. Utilizing case studies of Medicare and the 2009-10 health care reform, Morgan and Campbell argue that the prevalence of delegated governance reflects the powerful role of interest groups in American politics, the dominance of Congress in social policymaking, and deep contradictions in Americanpublic opinion. Americans want both social programs and small government, leaving policy makers in a bind. Contracting out public programs to non-state actors masks the role of the state and enlists private allies who push for passage. Although delegated governance has been politically expedient,enabling the growth of government programs in an anti-government political climate, it raises questions about fraud, abuse, administrative effectiveness, and accountability. In probing both the causes and consequences of delegated governance, The Delegated Welfare State offers a novel interpretationof both American social welfare politics and the nature of the American state.

Excerpt

On March 23, 2010, President Barack Obama signed into law a health care reform bill that had as its centerpiece an expansion of coverage to the uninsured. the bill was hotly contested and, despite large Democratic majorities in Congress, difficult to pass. One of the mostly vividly debated issues was the extension of federal authority over the health care system. Republican critics charged that the Democrats’ reform proposals were “socialism,” would create “death panels … that give the government the power to deny care based on budgetary concerns,” and would lead to a “massive government takeover of health care.” in fact, the law did little to directly increase federal power over the health care system. Building upon the existing system of employer-sponsored insurance, the law subsidizes coverage for the uninsured through private insurers or state Medicaid programs, and many of the latter already contract with private managed care firms to provide insurance. State governments will set up health plan exchanges for individuals and small businesses and are responsible for enforcing new federal standards for insurer policies. Beyond paying the bills, the role of federal agencies is to write regulations, oversee the actions of state governments, and serve as a fallback if states fail or refuse to perform their assigned tasks. Although the 2010 health care bill was a major piece of social legislation, it did not move the United States any closer to socialized medicine or federal government domination of the health care system.

Instead, the law followed a well-established template in American social policymaking of delegating responsibility for publicly funded social welfare programs to private entities and state governments. Repeatedly, policy-makers have discovered that using private actors or lower levels of government to deliver services or administer programs enables them to respond to pressing social demands without seeming to expand the size of the federal government. It also allows them to cut private interests into the deal, channeling public dollars to a host of nongovernmental entities, including charitable organizations, banks (student loans) , landlords (housing vouchers), HMOs and other health insurance companies (Medicare and Medicaid), and others. a third advantage lies in the ability of policy-makers to shift potential conflicts away from the public arena, letting private . . .

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