When we talk about health care in the United States, Medicaid is often at the center of the conversation. Born from a moment of profound national transformation in the 1960s, its roots stem from the Civil Rights Movement, the war on poverty, and a growing recognition that health care is essential for human dignity and opportunity. For the last 60 years, this essential program has covered tens of millions of low-income families, children, seniors, people with disabilities, and increasingly, working adults.
In 2025, when Medicaid covers nearly 78.7 million individuals, or about 23% of the US population, it’s difficult to remember when this foundational program did not exist. As a program that has grown, adapted, and innovated to meet the changing needs of the American people – and continues to evolve with technological advances, artificial intelligence, and policy reforms – Medicaid remains central to efforts to expand access, equity, and innovation in care delivery. Whether you’re a policy maker, advocate, or beneficiary, understanding the impacts of Medicaid offers essential context for shaping its future.
America Before Medicaid
Beginning in the 1930s, health insurance was largely in the private-market domain, dominated by employer-based plans. Health care coverage for low-income Americans was difficult to obtain, since insurers gave lower premiums to people with better health outcomes and utilized preexisting conditions and risk factors – like working in a coal mine or a family history of chronic illness – to charge more or refuse to offer coverage.
Public hospitals, charity care, and county welfare offices were often the only places to seek care. However, many people, especially people of color, the elderly, and those in rural or underserved areas often had no reliable access to doctors or hospitals or went without.
The Origins of Medicaid
When the Great Depression made health disparities even more clear, Franklin D. Roosevelt (FDR) and his advisors discussed incorporating national health insurance into the New Deal. As a person with polio that had left him paralyzed from the waist down, he believed in a government that helped people in need and that all Americans benefit when they protect themselves from common vulnerabilities. However, when the American Medical Association stated they would not support the Social Security bill if it included health insurance provisions, the medical component was removed.
FDR’s work continued with Truman, who had become aware of health care disparities during World War I, when he observed the poor health of his fellow soldiers, and when he was a county judge in Missouri. His proposal to create a national health care coverage system was stalled by those in Congress who were against creating another new government program so soon after the New Deal. In addition, the American Medical Association was opposed due to its fears of socialism in a time of anxieties around the Cold War.
The Creation of Medicaid
Progress was stalled until President Lyndon B. Johnson launched his Great Society initiative, a set of domestic programs aimed at eliminating poverty and racial injustice. Alongside education, civil rights, and welfare reform, health care became a cornerstone of Johnson’s vision.
In July 1965, President Johnson – with President Truman at his side – signed the Social Security Amendments of 1965 into law. The bill created two groundbreaking health programs:
- Medicare, a national insurance program for people aged 65 and older, regardless of income.
- Medicaid, a joint federal-state program designed to provide medical assistance to individuals and families with low incomes and limited resources.
Medicaid was restricted to people who were receiving public cash assistance, such as Aid to Families with Dependent Children (AFDC), Supplemental Security Income (SSI), and other categorical welfare programs. This connection to welfare created significant eligibility restrictions that would only begin to loosen in later decades.
Unlike Medicare, which is fully federally managed, Medicaid was designed to be a partnership between the federal government and the states. Although states were not required to participate, the combination of federal funding, provider support, and public and economic pressure made Medicaid participation too beneficial for them to ignore. Over time, all 50 states and Washington, D.C., have recognized Medicaid as an essential tool for promoting their residents’ health and financial stability.
Early Years and Expansion: 1970s–1980s
Throughout the 1970s and 1980s, Medicaid underwent incremental but important changes that reflected social change, such as the Disability Rights Movement, investigative journalism about the mistreatment of people in large, state-run institutions, and family advocacy. These accompanied and propelled the growing understanding that health care coverage was essential for many Americans. One of the most notable changes came in 1972, when the Supplemental Security Income (SSI) program provided individuals receiving SSI benefits with automatic eligibility for Medicaid coverage in most states.
In 1981, further progress was made with Section 1915(c) of the Social Security Act, authorizing the Medicaid Home and Community-Based Services (HCBS) waiver program. Under this program, states were authorized to expand their services and began offering Medicaid to people who previously would have been under institutional care, including nursing homes and facilities for people with developmental disabilities.
Broadening the Safety Net: 1990s
The 1990s saw a major turning point in Medicaid’s evolution, especially when the Children’s Health Insurance Program (CHIP) was created in 1997. Driven by a bipartisan effort, Congress designed CHIP to provide coverage for children in families with incomes too high for Medicaid but too low to afford private insurance. Before CHIP, 10 million children, or 15% percent of all children, did not have health care coverage. Since its inception, CHIP – and the coverage gains made under the Affordable Care Act – have reduced the number of uninsured children by 70%, to 3.7 percent. In 2020, approximately 9.1 million children were enrolled in CHIP.
The 1990s also saw a time where states could control rising Medicaid costs by contracting with private health plans. This important step helped make Medicaid more financially sustainable, broaden networks of providers and services, and coordinate care. Since managed care included preventive services, health outcomes could improve as well. All of this broadened the safety net to cover even more families and individuals, including those with low incomes, pregnant women, and those with disabilities.
However, this state-controlled version of health care coverage has its issues as well. Because Medicaid gives states substantial control over eligibility, benefits, and administration, access to health coverage has long depended on where someone lives. This state-by-state approach has created significant differences in who qualifies for Medicaid and which services they receive.
The Affordable Care Act and Medicaid Expansion: 2010–2020
The most transformative change in Medicaid’s modern history came with the passage of the Affordable Care Act (ACA) in 2010. This landmark law included a provision to expand Medicaid eligibility to nearly all adults with incomes up to 138% of the federal poverty level, regardless of family status, disability, or age – and transformed Medicaid from a narrowly targeted program into a broader, more inclusive source of health coverage and strengthening the overall health care system.
The ACA also introduced new tools to streamline enrollment, simplify eligibility, and encourage states to modernize their Medicaid systems.
The original law required all states to expand Medicaid, but a 2012 Supreme Court decision made expansion optional. Since then, Medicaid expansion has become a major policy battleground between federal and state governments. As of 2025, 41 states and Washington, D.C., have adopted Medicaid expansion. Expansion has led to millions of newly insured Americans, especially in rural communities and among working adults.
Medicaid During the COVID-19 Pandemic: 2020–2023
During the COVID-19 public health emergency, Medicaid played a crucial role in covering millions of Americans, especially those hit hardest by COVID-19, did not lose health coverage, providing a stable source of care in a time of crisis. To assist even more, Congress passed the Families First Coronavirus Response Act (FFCRA), which temporarily increased federal funding and prevented states from disenrolling beneficiaries during the emergency. This led to historic growth in enrollment, reaching over 90 million people by early 2023. In 2023, states began the process of “unwinding” the continuous coverage requirement, leading to the redetermination of eligibility for millions of beneficiaries.
The Future of Medicaid
In 2025, Medicaid covers approximately 1 in 4 Americans, making it the largest single source of health coverage in the United States. Today, Medicaid not only funds health insurance for low-income individuals but also supports:
- Long-term care for seniors and people with disabilities
- Services for children with special needs
- Mental health and substance use treatment
- Community health programs and rural hospitals
As the health care system continues to evolve – with technological advances, artificial intelligence, and policy reforms on the horizon – Medicaid remains central to efforts to expand access, equity, and innovation in care delivery.
Conclusion
In 1965, Medicaid was born from a vision begun in the 1930s to ensure that poverty would not be a barrier to medical care. Since its inception, it has grown, adapted, and innovated to meet the changing needs of the American people. While challenges remain, its core mission remains steadfast: to protect the health and dignity of those who need it most.
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