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Medicaid at 50: A Critical and Evolving Pillar of U.S. Health Care

Fifty years after its birth, Medicaid is an essential and popular part of the nation’s health care system, providing quality health care services for over 80 million low-income Americans at some point during 2014.  The program, which has bridged gaps in health care access for five decades, has assumed an even greater role under health reform.

Medicaid’s impact was swift.  Before President Johnson signed Medicaid into law in 1965, poor families mostly depended on charity care, and many went without treatment.  Medicaid brought a rapid change for these families, prompting dramatic drops in infant mortality rates and infectious diseases like influenza and pneumonia.  The percentage of low-income people who saw a physician rose from 56 percent in 1963 to 65 percent by 1970.  In 1970, 71 percent of poor pregnant women received care in the first trimester of their pregnancies, up from 58 percent in 1963. 

It has filled in gaps in health care access.  Originally, Medicaid was almost exclusively available to people receiving cash assistance through state programs for families with dependent children, seniors, and people with disabilities.  In the 1980s and 1990s, policymakers expanded eligibility, enabling many more low-income children, parents, and pregnant women in working families to qualify for coverage.  Today, Medicaid covers nearly half of all pregnant women, ensuring that their babies have a healthy start, and more than a third of children.

It has transformed care for seniors and people with disabilities.  Lawmakers gave states the option to cover working people with disabilities, which allowed people to work without fear of losing their health care — including the long-term services and supports that enable them to work in the first place.  Medicaid benefits more than 9 million people with disabilities and 5 million seniors in any given month.  States also used Medicaid’s flexibility to shift care for people with disabilities and seniors away from nursing homes and other institutions to the community.  By 2011, 80 percent of non-elderly beneficiaries with disabilities and half of seniors were receiving home and community-based services rather than institutional care. 

Medicaid’s positive effects are long-lasting.  Medicaid’s expansions of the 1980s and 1990s to cover more children boosted the likelihood that eligible children would complete high school and college, a National Bureau of Economic Research study found.  Other studies have found that children eligible for Medicaid contribute more in taxes due to lower Earned Income Tax Credit payments and higher earnings and have fewer emergency room visits and hospitalizations as adults. 

Medicaid is key to the future of U.S. health care.  Medicaid continues to adapt to changing times.  Health reform expanded Medicaid eligibility to non-elderly adults without children in the home, and 28 states and the District of Columbia have expanded Medicaid so far, with Alaska poised to join the expansion this fall.  Expansion states have experienced significant drops in the number of uninsured, realized budget savings, and cut costs of uncompensated care for hospitals.  States have also used Medicaid’s flexibility to implement initiatives that reduce unnecessary emergency room use, improve care for people with chronic conditions through better coordination of the multiple services they receive, and support efforts to get people with mental illness back to work and in stable housing.  By 2020, an estimated 14 million more adults and children will enroll in Medicaid and gain access to affordable health coverage.

At 50, Medicaid is providing access to critical health care services for millions of Americans, and it has reduced the number of uninsured dramatically.  Yet, there’s still work to do in the years ahead to ensure that Medicaid’s success reaches all of the low-income Americans who could benefit from its coverage.