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The article focuses on Medicaid, which has been severely affected from the economic recession. It highlights the most important step in federalizing parts of Medicaid, the massive health insurance program for the poor and nursing home residents jointly financed by the government and states. Several proposals that suggests alternative mechanisms for federalizing different elements of Medicaid have been set forward, giving politicians plenty of flexibility in reaching a consensus on how to make best of the transition. It also states that the virtues of federalizing Medicaid would be to lessen the fragmentation in the U.S. health care system.