Establishing a balance of power between states and the federal government has defined the American Republic since its inception. This conflict has played out in sharp relief with the implementation of the Affordable Care Act. This article describes the interplay between state and federal governments in the implementation of the act in three areas: the expansion of eligibility for Medicaid, implementation of the insurance Marketplaces, and regulation of insurers. The experience shows that states are intimately involved in health care and that useful policy and fiscal advantages can result from that involvement. However, strong national standards are critical to preventing partisan politics from trumping the health policy process.