You may not have heard of Medicare or Medicaid if you are familiar with the U.S. insurance system. Even if you have or have not, Medicaid holds significant meaning for U.S. citizens. That is, it provides health care coverage for more than 72 million Americans across the nation. Medicaid spending accounts for around ? of the budget that the national governments spend on healthcare. A couple of years ago, states were allowed to expand Medicare under the Affordable Care Act (ACA). This article will explore the correlation between these two acts. 

History of Medicaid: 

Before we began exploring the Affordable Care Act, perhaps it would be better to understand the roots of Medicaid and the controversy surrounding it. The backbone of Medicaid dates back to 1935, when the Social Security Act was enacted. Essentially, it gave states federal money to give financial assistance to seniors. This sparked the creation of the private nursing industry. Soon, in 1939, federal governments in regard to health, social security, and education were brought together under the Federal Security Agency. However, the most notable act is the enactment of the Medicaid Act itself. The Social Security Amendments of 1965, better known as the Medicaid and Medicare Act,   were signed into law by former President Lyndon B. Johnson on July 30, 1965. This act included basic health insurance for people 65 or older and a separate program providing health insurance for those with limited income, which was funded by both federal and state sources. In the first  3 years alone, 20 million people enrolled in it. I know that Medicare and Medicaid are very easy to get confused, so just for clarification, Medicare refers to federal health insurance for individuals 65 years or older. Medicaid is health coverage provided by the states and the federal government for those who are low-income. It is jointly funded by the states and the federal government, meaning each state operates its own medicaid program within the federal guidelines. 

Medicaid and the Affordable Care Act: 

Medicaid is a “counter-cyclical program: its enrollment expands to meet rising needs during an economic downturn, when people lose their jobs and job-based health coverage”. For example, during and after the Great Recession of 2007-2009, 10 million additional people enrolled in Medicaid. This clearly demonstrates the importance of Medicaid and why it should be held in high regard in American society. Furthermore, since Medicaid is an “entitlement program”, everyone who meets the eligibility criteria has the right to enroll. States can also receive federal funds to cover “optional populations.” These are for the people whose income is over the eligible income. This includes non disabled low income adults ( even children) under the Affordable Care Act, which sought to expand Medicaid to all non-disabled adults who earn up to 138% of the federal poverty level, even childless adults. However, in a 2012 decision, the Supreme Court ruled that it was up to the states to choose whether to expand Medicaid under the ACA or not. As of April 2020, 15 states have not implemented the Medicaid expansion under the ACA. As of now, this number has reduced, and 10 states have not expanded Medicaid under the ACA. In these ten states, there are 1.4 million people caught in the “coverage gap”. Essentially, these 1.4 million individuals earn above the Medicaid eligibility requirement but are still below the poverty level. Furthermore, since their state did not expand Medicaid,  they are ineligible for ACA Marketplace subsidies. 

Works Cited

kffcarenec. “How Many Uninsured Are in the Coverage Gap and How Many Could Be Eligible If All States Adopted the Medicaid Expansion? | KFF.” KFF, 25 Feb. 2025, www.kff.org/medicaid/how-many-uninsured-are-in-the-coverage-gap-and-how-many-could-be-eligible-if-all-states-adopted-the-medicaid-expansion/.

“Medicaid: A Brief History of Publicly Financed Health Care in the United States.” Center for Health Care Strategies , Aug. 2019, www.chcs.org/media/Medicaid-Timeline-Fact-Sheet_01.14.20v2.pdf.

National Archives. “Medicare and Medicaid Act (1965).” National Archives, 8 Feb. 2022, www.archives.gov/milestone-documents/medicare-and-medicaid-act.

Priorities, Center on Budget and Policy. “Policy Basics: Introduction to Medicaid.” JSTOR, 2020, www.jstor.org/stable/resrep24218.