This article covers the provision of public and private health insurance. Health care has major implications for the state budget and the state economy. It describes New York's policies that regulate private health insurance and shape its Medicaid program. It then describes efforts to reform Medicaid through “executive federalism.” New York offers two major cautions for health reformers who support major federal initiatives to constrain the growth in health care costs. Health care is a key driver of state and local government costs. The dominance of Medicaid in New York's health insurance market, who it covers, and its sheer size in the state budget have tended to overshadow the private health insurance market. The tools of executive federalism represent potential mechanisms for shifting control of the Medicaid program to the executive branch. New York provides a cautionary note for health and long-term care reform at the national level.