State Health Empowerment and Federalism Restoration Act of 2025

This Act converts the Medicaid program from a federally dictated, one-size-fits-all entitlement into a flexible block grant to each state, thereby allowing states to design and administer healthcare programs that best meet the unique needs of their residents. States shall receive a fixed annual allocation from the federal government, based on historical spending and adjusted for inflation and population growth, and shall have full discretion to determine eligibility, benefits, and delivery methods, subject to minimal federal requirements intended solely to prevent fraud and ensure basic health and safety standards. The Act also repeals the individual mandate penalty and removes federal restrictions on the purchase of health insurance across state lines, permitting insurers to offer policies in any state provided they meet the regulatory standards of their home state. Furthermore, the Act prohibits any federal agency from imposing new mandates on states or individuals without explicit congressional authorization, and requires that any future federal healthcare regulation include a clear statement of constitutional authority and a cost-benefit analysis demonstrating that the federal interest cannot be achieved by state action alone.

This proposal adheres to Article I, Section 8, Clause 1 (Spending Power) by converting Medicaid to a block grant, which is a permissible exercise of Congress's power to tax and spend for the general welfare, while respecting the Tenth Amendment by returning authority to the states. The interstate insurance provision is grounded in the Commerce Clause (Article I, Section 8, Clause 3), as insurance policies sold across state lines constitute interstate commerce. The Act does not abridge any right; it removes federal mandates that burden individuals and states, shifting the burden of justification to the government by requiring explicit constitutional and cost-benefit justifications for any new federal regulation. It favors decentralization by granting states primary authority over healthcare design, and it satisfies due process by preserving existing state-level protections and ensuring that any federal action is transparent and subject to judicial review under the Fifth and Fourteenth Amendments.