Why do some states choose to spend more than four times as much as others to provide health care to the disadvantaged? Political scientists who have traditionally explored this question by analyzing trends in overall Medicaid expenditures lumped states' discretionary spending in with other money that states are mandated to spend. Analyses of total expenditures found that socioeconomic factors drove spending but that party control of state legislatures made no difference in health policy making. Focusing not on the spending that the federal government requires of state officials but on the policies that state officials actually choose allows a balanced exploration of both political and economic effects on welfare expenditures. This research also provides new insights about which forces will shape policy decisions if more and more control of the public health care system is devolved to the states.