I was in the 10th grade at Tyner High School in Chattanooga when Medicaid passed as Title XIX of the Medicare and Medicaid Act of 1965. It was the cornerstone of President Johnson’s War on Poverty providing federal funding to states to facilitate access to the health system Americans along with dependent children, seniors, blind, and disabled individuals with insufficient income.

Medicaid, then as now, was the understudy to Medicare. It was understandable: per capita costs for caring for seniors were three times those in Medicaid, and aging was the tsunami health officials saw. In the 60-years since, Medicare has become the arbiter for federal reimbursement in every setting where seniors received services. It has enabled hospitals and specialty care to expand and limited preventive and primary care to the bare minimum. And its version of managed care, Medicare Advantage plans, now enroll over half its 70 million enrollees. It’s ridden on the back of federal policy, while states have been left to fend for themselves in Medicaid. But that’s changing.

While Medicare has gotten the majority of attention from hospitals, physicians, insurers and drug companies historically, it is Medicaid that’s taking center stage in the U.S. health system.  Here’s why:

• Scale: When Medicaid was enacted in 1966, it enrolled, 4 million, or 2% of the entire population. Today, it enrolls 74 million, or 21%. Enrollment has grown as a result of three factors: changes in eligibility that states control, slower wage growth and shrinking health benefits in working class populations, and the Affordable Care Act’s federal inducement for Medicaid expansion that passed referenda in 40 states. It’s a huge program.
• Clinical focus: Medicaid forces attention to mental health in communities, schools and workplaces. It is ground zero for the historic lack of integration of public health programs (i.e. housing, food security, financial insecurity) with local health services. It is an unwelcoming front door to the health system for 40% of America’s children where maternal and child health, behavioral health and essential services are unavailable. And it’s the nation’s lab for ageism, loneliness and anxiety. Notably, private Medicaid Managed Care Organizations (MCOs) are firmly seated at the steering wheel of care coordination in state Medicaid programs covering 72% of enrollees already. Long before Medicare Advantage, community-based and private MCOs were prominent in Medicaid because they’re inclined to focus on whole-person care, not just doctors and hospitals.
• Structure: Medicaid forces states to prioritize investments in healthcare vs. education, homeland security, roads and parks. Medicaid forces state legislatures to regulate private managed care operators who contract to coordinate care for enrollees to assure care is evidence-based, accessible and appropriately priced and delivered. And the federal government’s financial participation enables its control of Medicaid funds to states that do not appropriate resources as it deems necessary. The collaboration or dissonance between states and federal health policies is pronounced in Medicaid.
• Politics: Medicaid allows partisans in Red and Blue states to defend their positions. Democrats, for example, promote income inequality as the root cause of the health system’s lack of affordability necessitating Medicaid as an imperfect but necessary solution. They see work requirements as a GOP mechanism to reduce enrollment. Republicans, by contrast, associate Medicaid with welfare that’s beset with fraud, waste and abuse and think it a money-pit for dubious operators. And leaders in both camps acknowledge bureaucratic flaws in Medicaid but fall short in fixing them.

Much of this can be traced to deep-seeded beliefs about Medicaid that span generations. In my focus groups with working age adults, the majority believe the U.S, economic system is more challenging for lower-income, uneducated and non-white populations. A significant number associate Medicaid with ‘welfare’ and believe waste and fraud prevalent though the intensity of these views varies widely.

In my surveys, Medicaid enrollees are slightly more likely to agree the health system is broken and favor government intervention than other groups. And the majority in every insurance, age, household income and region agree the system’s unnecessarily expensive and significantly more focused on profits than patient care. They see Medicaid as part of a complex system that’s unfair, unaffordable and unnavigable.

My take:

The public’s views about Medicaid are complicated: the majority believe everyone regardless of income or insurance status should have access to the system, and there’s consensus the system in its current form will not survive. The majority of voters regardless of party label believes Medicaid needs to be fixed but no consensus on how or by whom.

Results from Medicare’s cost containment efforts—accountable care organizations, alternative-payment models, value-based purchasing, price transparency et al—have been mixed. By contrast, Medicaid initiatives in states ranging from payment integrity programs to changes in state directed payment policies have produced significant savings necessary to surviving the $1 trillion, 10-year cut to federal Medicaid funding in the Big Beautiful Bill.

Medicaid is the health system’s most important platform for applying evidence to care cost-effectively from cradle to grave.