The Medicaid system has emerged as an early goal of the Trump administration’s marketing campaign to slash federal spending. A joint federal and state program, Medicaid gives medical insurance protection for greater than 72 million folks, together with low-income People and their youngsters and other people with disabilities. It additionally helps foot the invoice for long-term take care of older folks.
In late February 2025, Home Republicans superior a finances proposal that might probably minimize US$880 billion from Medicaid over 10 years. President Donald Trump has backed that Home finances regardless of repeatedly vowing on the marketing campaign path and through his group’s transition that Medicaid cuts had been off the desk.
Medicaid covers one-fifth of all People at an annual value that coincidentally additionally totals about $880 billion, $600 billion of which is funded by the federal authorities. Economists and public well being consultants have argued that massive Medicaid cuts would result in fewer People getting the well being care they want and additional pressure the low-income households’ funds.
As a historian of social coverage, I not too long ago led a group that produced the primary complete historic overview of Medi-Cal, California’s statewide Medicaid system. Just like the broader Medicaid program, Medi-Cal emerged as a compromise after Democrats failed to attain their purpose of creating common well being care within the Nineteen Thirties and Nineteen Forties.
As a substitute, the USA developed its present fragmented well being care system, with employer-provided medical insurance masking most working-age adults, Medicare masking older People, and Medicaid as a security internet for no less than a few of these overlooked.
Well being care reformers vs. the AMA
Medicaid’s historical past formally started in 1965, when President Lyndon B. Johnson signed the system into legislation, together with Medicare. However the seeds for this program had been planted within the Nineteen Thirties and Nineteen Forties. When President Franklin D. Roosevelt’s administration was implementing its New Deal agenda within the Nineteen Thirties, lots of his advisers hoped to incorporate a nationwide medical insurance system as a part of the deliberate Social Safety program.
These efforts failed after a heated debate. The 1935 Social Safety Act created the old-age and unemployment insurance coverage methods we’ve got at the moment, with no provisions for well being care protection.
However, throughout and after World Struggle II, liberals and labor unions backed a invoice that might have added a medical insurance program into Social Safety.
Harry Truman assumed the presidency after Roosevelt’s dying in 1945. He enthusiastically embraced that laws, which advanced into the “Truman Plan.” The American Medical Affiliation, a commerce group representing a lot of the nation’s docs, feared heightened regulation and authorities management over the medical career. It lobbied towards any type of public medical insurance.
This PBS ‘Origin of Everything!’ video sums up how the U.S. wound up with its complicated well being care system.
In the course of the late Nineteen Forties, the AMA poured tens of millions of {dollars} right into a political promoting marketing campaign to defeat Truman’s plan. As a substitute of obligatory authorities medical insurance, the AMA supported voluntary, non-public medical insurance plans. Personal plans similar to these supplied by Kaiser Permanente had change into more and more widespread within the Nineteen Forties within the absence of a common system. Labor unions started to demand them in collective bargaining agreements.
The AMA insisted that these non-public, employer-provided plans had been the “American way,” versus the “compulsion” of a medical insurance system operated by the federal authorities. They referred to common well being care as “socialized medicine” in broadly distributed radio commercials and print adverts.
Within the anticommunist local weather of the late Nineteen Forties, these ways proved extremely profitable at eroding public help for government-provided well being care. Efforts to create a system that might have supplied everybody with medical insurance had been soundly defeated by 1950.
JFK and LBJ
Personal medical insurance plans grew extra frequent all through the Nineteen Fifties.
Federal tax incentives, in addition to a want to take care of the loyalty of their skilled and blue-collar staff alike, spurred corporations and different employers to supply non-public medical insurance as a typical profit. Wholesome, working-age, employed adults – most of whom had been white males – more and more gained non-public protection. So did their households, in lots of circumstances.
Everybody else – folks with low incomes, those that weren’t working and other people over 65 – had few choices for well being care protection. Then, as now, People with out non-public medical insurance tended to have extra well being issues than those that had it, that means that in addition they wanted extra of the well being care they struggled to afford.
However this additionally made them dangerous and unprofitable for personal insurance coverage corporations, which usually charged them excessive premiums or extra usually declined to cowl them in any respect.
Well being care activists noticed a possibility. Veteran well being care reformers similar to Wilbur Cohen of the Social Safety Administration, having misplaced the battle for common protection, envisioned a narrower program of government-funded well being take care of folks over 65 and people with low incomes. Cohen and different reformers reasoned that if these populations might get protection in a government-provided medical insurance program, it would function a step towards an eventual common well being care system.
Whereas President John F. Kennedy endorsed these plans, they might not be enacted till Johnson was sworn in following JFK’s assassination. In 1965, Johnson signed a landmark well being care invoice into legislation beneath the umbrella of his “Great Society” agenda, which additionally included antipoverty applications and civil rights laws.
That legislation created Medicare and Medicaid.
From Reagan to Trump
As Medicaid enrollment grew all through the Nineteen Seventies and Nineteen Eighties, conservatives more and more conflated this system with the stigma of what they dismissed as unearned “welfare.” Within the Nineteen Seventies, California Gov. Ronald Reagan developed his nationwide repute as a number one determine within the conservative motion partly by way of his high-profile makes an attempt to chop and privatize Medicaid companies in his state.
Upon assuming the presidency within the early Nineteen Eighties, Reagan slashed federal funding for Medicaid by 18%. The cuts resulted in some 600,000 individuals who relied on Medicaid all of a sudden dropping their protection, usually with dire penalties.
Medicaid spending has since grown, however this system has been a supply of partisan debate ever since.
Within the Nineteen Nineties and 2000s, Republicans tried to alter how Medicaid was funded. As a substitute of getting the federal authorities match what states had been spending at completely different ranges that had been primarily based on what the states wanted, they proposed a block grant system. That’s, the federal authorities would have contributed a hard and fast quantity to a state’s Medicaid finances, making it simpler to constrain this system’s prices and probably limiting how a lot well being care it might fund.
These efforts failed, however Trump reintroduced that concept throughout his first time period. And block grants are among the many concepts Home Republicans have floated since Trump’s second time period started to attain the spending cuts they search.
Protesters in New York Metropolis object to Medicaid cuts sought by the primary Trump administration in 2017.
Erik McGregor/LightRocket through Getty Photographs
The ACA’s growth
The 2010 Reasonably priced Care Act enormously expanded the Medicaid program by extending its protection to adults with incomes at or under 138% of the federal poverty line. All however 10 states have joined the Medicaid growth, which a U.S. Supreme Court docket ruling made optionally available.
As of 2023, Medicaid was the nation’s largest supply of public medical insurance, making up 18% of well being care expenditures and over half of all spending on long-term care. Medicaid covers almost 4 in 10 youngsters and 80% of kids who dwell in poverty. Medicaid is a very essential supply of protection for folks of colour and pregnant girls. It additionally helps pay for low-income individuals who want expert nursing and round the clock care to dwell in nursing houses.
Within the absence of a common well being care system, Medicaid fills most of the gaps left by non-public insurance coverage insurance policies for tens of millions of People. From Medi-Cal in California to Husky Well being in Connecticut, Medicaid is an important pillar of the well being care system. This makes the proposed Home cuts simpler mentioned than performed.
