Congress passed the original Medicaid program in 1965 as a health insurance safety net for the most vulnerable low-income people in the United States. These individuals include the poor, parents with children, the disabled, and those needing long-term care. Medicaid is a pure welfare plan financed by both state and federal taxpayers. Of course, state and federal taxpayers are the same individuals, families, and businesses.
The original program was set up such that the federal government would match the financing with states in a 50/50 percent arrangement. Congressional members at the time believed that state legislators would resist increasing the size of Medicaid simply because they would want to limit the impact on their state budgets.
The exact opposite has occurred. State officials look at the Medicaid program as “free” federal money. Unlike other state budget items, for every state dollar legislators spend on Medicaid, they get a matching federal dollar. The Medicaid program is now one of the top three budget items for every state in the U.S. and is one of the federal government’s largest non-discretionary spending programs. Inflation-adjusted spending the first year of Medicaid was $10 billion compared to $900 billion for fiscal year 2023 . In other words, Medicaid spending has exploded far beyond inflation alone…