Federalism has complicated the U.S. response to the novel coronavirus. States’ actions to address the pandemic have varied widely, and federal and state officials have provided conflicting messages. This fragmented approach surely cost time and lives. Federalism will shape the long-term health and economic impacts of COVID-19, including plans for the future, for at least two reasons: First, federalism exacerbates inequities, as some states have a history of under-investing in social programs, especially in certain communities. Second, many of the states with the deepest needs are poorly equipped to respond to emergencies due to low taxes and distrust of government, leading to inadequate infrastructure. These dynamics are not new, but they have been laid bare by this crisis. What can policymakers do to address the inequities in health and economic outcomes that federalism intensifies? The first section of this paper offers a case study, using the Mississippi Delta to illustrate the role of federalism in perpetuating the connection between place, health, and economics. The second section examines challenges that safety net programs will face moving beyond the acute phase of COVID-19. Our final section explores near-, middle-, and long-term policy options to mitigate federalism’s harmful side effects.