Medicaid: A Complicated History
Executive Summary
This field note examines the historic background of Medicaid, from initial implementation to its major expansion under the Affordable Care Act. The debate over how the nation should handle American healthcare continues to this day.
Introduction
Medicaid is one of the largest healthcare programs in the United States and serves individuals and families with lower incomes. This is the first entry in a series of field notes about Medicaid and the many issues impacting implementation across the nation, including political viewpoints, public sentiment, historical reforms, stakeholder needs, and the unforeseen consequences of policies.
Historical Background
For this field note, two significant times in healthcare policy history are discussed: the original implementation of Medicaid and later expansion through the Patient Protection and Affordable Care Act (ACA).
President Lyndon B. Johnson signed amendments into law establishing Medicare and Medicaid in 1965 as part of the Social Security Act and his overall policy goals as set under the Great Society plan. Title XIX of the Social Security Act, Public Law 89-97, partly states:
“SEC. 1901. For the purpose of enabling each State, as far as practicable under the conditions in such State, to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or permanently and totally disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care, there is hereby authorized to be appropriated for each fiscal year a sum sufficient to carry out the purposes of this title...”
— Public Law 89-97, pages 343-344
The issue of how to expand healthcare continued to be debated over the coming decades and did not reach a conclusion. William H. Stewart, who served as Surgeon General of the United States (1966-1969) during the time these new health programs were starting to be implemented, thought a national health insurance program was a future possibility. During an interview in 1968, Stewart was asked about whether he would agree with a proposed national health insurance program and he partly stated,
“…I'm not sure what it is in form, I think that the great national health debate over the next decade is whether you will or will not have national health insurance and what form it will take. I think there will be some kind of national health insurance. There are no answers to Medicaid's problems, to the problems of rising costs, to the problems of maldistribution of services, without some mechanism like this. This is why I was saying, I don't think the organization can be talked about as complete yet because I think the federal role is still unfolding, and I think we'll roll with it for awhile. My guess is the next 8 years will be spent debating this…”
— William H. Stewart, Interview on December 2, 1968, with David G. McComb, Pages 43-44
The debate lasted much longer than eight years. A milestone for Medicaid came in 2010 when President Barack Obama signed the ACA into law. The result was Public Law 111-148, a 906-page law which included the expansion of Medicaid for nonelderly adults with incomes reaching up to 133% of the federal poverty level (effectively 138% after applying the ACA’s 5% income disregard). Two years later, the United States Supreme Court ruled that states could choose whether to expand Medicaid and receive the matching federal dollars. As of 2026, 40 states, and Washington, D.C., have expanded Medicaid while ten states have not pursued expansion. As of January 2026, data shows 68,022,529 people are enrolled in the Medicaid program.
The Debate Continues
“Repealing the ACA, as some have suggested, risks rolling back consumer protections — like making it illegal to discriminate against those with pre-existing conditions and improving benefits — for Americans who get health insurance through the Marketplace, Medicare, Medicaid, or on the job. A recent study shows nearly 30 million Americans would lose their coverage under one version of repeal as well. We can work together to make the system even better, but we should build on the progress we’ve made, not go backwards.”
— Sylvia Mathews Burwell, Secretary of Health and Human Services (Exit Memo, January 5, 2017)
Opposition to the ACA continued after implementation, with some policymakers and stakeholders advocating for repealing the law, modifying the rules, or shifting toward a market containing more private insurance options. Former President Barack Obama referred to these efforts fourteen years after passage by partly stating,
“In so many ways, the Affordable Care Act has become part of our lives, changing the way we think about health insurance. But that doesn’t mean we can take it for granted. Right now, some Republicans are still trying to repeal and gut the ACA — including calling for cuts that could put insurance out of reach for tens of millions of Americans. We’ve come too far to let that happen…”
— Former President Barack Obama (My Statement on the 14th Anniversary of the Affordable Care Act, March 23, 2024)
Upcoming Analysis
Future field notes in the Medicaid series will include analysis of the following aspects of Medicaid:
· State Reactions to Expansion Under the ACA
· Competing Viewpoints on the ACA
· Changes Made through the One Big Beautiful Bill Act
· Recent Federal Medicaid Actions
· Recent State-Level Activity
· Fee-For-Service and Managed Care Plans
· Waivers
· Fraud, Waste, and Abuse