Medicaid, which provides health insurance to low-income Americans and the elderly who are confined to nursing homes, has always been a joint federal-state program. In recent years, the Clinton administration has granted states increasing leeway to manage Medicaid as they see fit. Despite this added flexibility, the National Association of State Budget Officers says that Medicaid remains the "single largest budget problem" for states. In this report, Paul Offner explores the impact of the shift toward greater state responsibility for managing Medicaid. Offner argues not only that the balance has shifted too far toward the states, but also that it would be better if the federal government ran the program entirely. The main reason, as he shows in this report, is that joint responsibility has led to widespread buck-passing and insufficient accountability.