WASHINGTON, July 18 — For the roughly 85 million low-income and disabled Americans who rely on Medicaid, the program is more than a safety net — it is often the only way to afford a doctor’s visit, a hospital stay, or long-term care. Created in 1965 as part of President Lyndon B. Johnson’s Great Society, the federal-state partnership has grown into the nation’s largest health insurer by enrollment.
But that reach now faces a significant test. The program’s structure gives states wide latitude.
The federal government sets baseline standards and provides substantial funding, but states decide eligibility and benefits. All 50 states have participated since 1982. That flexibility was put to the test after the Affordable Care Act expanded coverage to households earning up to 138 percent of the federal poverty line.
A 2012 Supreme Court decision let states opt out of the expansion without losing pre-ACA funding levels — and several Republican-led states did just that. What does that mean for the people who rely on Medicaid?
The numbers tell a stark story of who gets what. Children make up 37 percent of enrollees but account for only 15 percent of spending, about $3,000 per person each year. Seniors and disabled individuals, by contrast, represent 21 percent of enrollees yet consume 52 percent of program dollars — more than $18,000 per person annually.
Those differences reflect the high cost of long-term services and supports: of the 7.7 million Americans who used such care in 2020, roughly 5.6 million were covered by Medicaid.
The Price of Coverage
Total federal and state spending on Medicaid reached $870 billion in 2023. The average cost per enrollee in 2021 was $7,600. In 2019, the program paid for half of all births in the United States.
Recipients must be U.S. citizens or qualified non-citizens. The program has been shown to improve health outcomes, boost coverage access, and strengthen financial security for those enrolled — and it also delivers economic benefits to states and health-care providers.
Politically, Medicaid remains a fault line. Democrats broadly support it. Republicans are divided, with some pushing for spending reductions.
Since the 1980s, states have increasingly turned to managed care waivers, enrolling recipients in private health plans that receive fixed monthly premiums. That shift has reshaped how care is delivered, often moving patients from fee-for-service into networks run by insurance companies.
A New Work Requirement
The 2025 One Big Beautiful Bill Act introduced what could become the most consequential change in years: work requirements for most able-bodied adult enrollees. Starting in 2027, they must document 80 hours per month of work or volunteer activity to maintain coverage. The law’s supporters argue it encourages self-sufficiency; critics warn it could strip insurance from people who cannot find steady work or who face barriers like caregiving or illness.
As 2026 progresses, states are beginning to prepare for the new rules. The human side of this story is still unfolding — millions of families wondering whether they will still qualify for the coverage they depend on.
For now, Medicaid remains the country’s largest health insurer, caring for 85 million people, paying for half of all births, and absorbing most of the cost for long-term care. The next year will test how far that commitment stretches.
Sources
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