Happy Birthday Medicaid! On July 30, 2015, Medicaid celebrates its 50th birthday.
There’s been a lot of controversy around Medicaid expansion since the passage of the Affordable Care Act (ACA), but the basic program has not been questioned. As it hits 50 years of implementation, it’s a good chance to look at what Medicaid has been and what it means to Americans.
History of the Medicaid Program
Medicaid began in 1965 and is run jointly by the states and federal government. This joint control is a key characteristic of Medicaid, which helps both states and the government meet their own goals with the program. However, the joint control has also been a battleground when the state and federal goals are in conflict.
The federal government finances a substantial portion of Medicaid –at least 50 percent of costs in each state, sometimes as high as 83 percent in some states. In all states that expanded Medicaid eligibility, the federal government is paying 100 percent of the costs for the first three years and will never pay less than 90 percent of the costs of this newly-covered population. It’s voluntary for states to participate – and it wasn’t until 1982 that all 50 states and the District of Columbia had a program. Yet, despite the fact that the federal government pays for much of Medicaid, there is a difference in how coverage is implemented around the country.
Today, Medicaid covers 70 million lower-income Americans, including children, parents, pregnant women, disabled individuals, and low-income seniors. Many states have expanded Medicaid with the funding incentives offered in the ACA and cover many more lower-income Americans than they did before.
Medicaid is an expensive program to maintain and administer because of the large number of people covered and the complex needs those Americans have. Medicaid is the second-largest expenditure in state budgets, after primary and secondary education costs. The program is third on the federal budget list, after Social Security and Medicare.
How Medicaid Impacts You
If you are like most Americans, you probably don’t give Medicaid very much thought. But keep in mind that you never know what life holds and Medicaid could be a life-saver for you someday.
Medicaid is an important, life-saving benefit to millions of lower-income and disabled Americans. In addition, it helps cover insurance gaps that affect people in specific minority groups. Finally, the prenatal and pediatric healthcare covered by Medicaid gives millions of lower-income children a healthy start in life.
In addition to helping cover the less fortunate, Medicaid has become a testing ground for health care innovation. Because both the states and federal government want to save money where they can, the implementation of Medicaid coverage is constantly being experimented with. The impact of new cost-saving and quality improvement programs is significant, because once they succeed in a state they may be replicated by other states and implemented by commercial insurers as well.
In 50 years, Medicaid has seen significant controversy and change. However, nothing changes the fact that this important program is a literal life-saver for over 70 million Americans, as well as a health care laboratory where new medical care techniques can be tested for cost-savings and quality improvement before being rolled out on a larger scale.
To learn more about the public reception of Medicaid, read ObamaCare and Support for Medicaid Expansion.