Why should she receive any public assistance at all for a purely elective procedure? Maybe they should pay for her facelift too?
Anyway, the correct answer is that once the federal government is out of it, it IS up to the state, where citizens have more direct input and control, at least in theory. It's such a simple answer even Rudy should have thought of it.
That would be an improvement, but this issue no more belongs to the states than legalizing slavery belongs to the states.