Okay, let's unpack this. We're going to get into
a program that so many people confuse with Medicare,
but it quietly functions as the largest single
source of funding for low -income health care
in the U .S. We are doing a deep dive into Medicaid
today. It's a real cornerstone of the American
safety net that is, well, it's massive, it's
essential, and it is always, always being debated.
It's such a crucial topic for a deep dive, you
know, partly because its structure is just so
That complexity, I think, often allows the program's
actual scope and its real social impact to get
buried under these simplified political talking
points. Right. But when you actually strip all
that away, we just look at the raw scale of it.
The program is a true financial and demographic
behemoth in the U .S. That scale is the first
thing that just jumps out at you. We're not talking
about some small niche program here. This is
a system that's jointly run by the federal and
state governments. And in 2023, it carried a
total annual cost of, well. A mind -boggling
$870 billion. An incredible number. To put that
in perspective for you, that's larger than the
GDP of most countries on Earth. And that immense
spending covers a colossal number of people.
We're talking 85 million low -income and disabled
individuals enrolled as of 2022. Wow. But, you
know, beyond just the sheer size of it, think
about its social significance. If you want just
one statistic that shows how deeply integrated
Medicaid is into American life, just look at
childbirth. In 2019 alone, the program paid for
half of all U .S. births. Half. That's incredible.
It is. It's just woven into the demographic and
the economic fabric of the country in a way that,
you know, very few other public programs really
are. So our mission in this deep dive is to move
beyond those headline numbers and really try
to understand the inner workings. We want to
look at the unique funding structure, the high
stakes policy battles that have really reshaped
it recently, and critically, the surprising hard
evidence of its societal impacts. Things you
might not expect from crime rates to financial
security. And that structural tension is absolutely
the key to understanding the program's whole
history. Medicaid is really defined by this.
This uneasy collaboration between the federal
and state governments. The feds provide matching
funds, often the majority of it. Right. But the
states have enormous latitude. They get to decide
on eligibility standards, benefit levels, and
maybe most importantly, what they pay doctors
and hospitals. So it's not really one program
at all. Exactly. Functionally, it's like 50 or
51 different versions of a national program.
And that variability is just central to all the
ongoing political debates and, frankly, the wildly
uneven quality of care you see from one state
to the next. OK, so let's start at the beginning.
Let's get into the foundations of how this massive
joint venture got started. back in the 1960s?
Well, Medicaid was established in 1965. It was
created through the Social Security amendments
in 1965. And it was a real flagship component
of President Lyndon B. Johnson's Great Society
programs. And it was created at the same time
as Medicare, which is where a lot of the confusion
comes from. At the exact same time. But the objective
for Medicaid was explicitly tied to poverty alleviation.
The goal was to help states assist residents
whose income and resources were just too low
to pay for private health insurance. So that's
the crucial philosophical split right there.
The goal was poverty assistance delivered through
medical care. That's totally different from Medicare,
which is a universal social insurance program
for the elderly, no matter how wealthy they are.
Precisely. And that difference is most obvious
when you look at how it's financed. Medicaid
is a joint federal -state partnership, and it's
funded through something called the Federal Medical
Assistance Program. percentages or FM. FMP. Yes.
And that's basically the federal matching fund
system that's provided to the states. So walk
us through how that matching system works. Is
the financial burden just split evenly down the
middle? Not at all. And that's the really clever
part of the design. The FMP system is designed
to be a kind of fiscal equalizer. It ensures
that the responsibility for funding health care
for the poor is shared. Yeah. But it disproportionately
favors states that have lower economic capacity.
Okay, so what does that look like in practice?
Well, the wealthiest states, say a California
or a New York, they receive the lowest possible
match, which is a 50 % FMAP, so the 50 -50 split.
But poorer states get a much larger federal match.
The federal government carries a greater financial
burden in those areas, sometimes up to 75 percent
or for certain populations, even higher. I see.
So the structure is meant to acknowledge that
while health care costs are pretty much universal,
a state's ability to pay for them is absolutely
not. It tries to create a minimum floor of coverage
across the whole country. That's the idea. The
FMAP is the essential bargain. States agree to
provide a baseline of care, and in return, the
federal government heavily subsidizes the cost,
especially for the states that can least afford
it on their own. But what does this mean for
state budgets? I mean, this has to create huge
pressure. Enormous pressure. On average, states
spend about 16 .8 percent of their own general
funds directly on their share of Medicaid. But
when you factor in that massive federal match
and you count the total program spending, Medicaid
ends up consuming about 22 percent of a state's
entire budget. A fifth of the entire state budget.
Yep. And that reliance means that any small change
in federal rules or matching rates can have these
immediate and severe ripple effects on state
treasuries and on other state services like education
or infrastructure. Given that kind of financial
strain, it's almost unbelievable that state participation
is technically voluntary. It is a historical
quirk, yes. States are not legally required to
participate. But because of the overwhelming
financial leverage, you know, the promise of
this huge pot of federal money for a politically
essential program, all states have participated
since 1982. Arizona was the last state to finally
join. So they can't really say no. In effect,
no. A state really can't abandon its low -income,
disabled, and elderly residents without the financial
stability that the FMAP provides. And here's
where it gets really interesting and I think
surprising for a lot of people, the spending
disparity. There are massive, massive differences
in costs, depending entirely on which group of
enrollees you're talking about. This is absolutely
critical. When we throw around the average annual
cost per enrollee, which is somewhere around
$7 ,600, that number hides this incredible variation.
You have to look at the eligibility groups. Look
at children, for instance. They make up the largest
group of enrollees, about 37 % of the total in
the 2021 data. And their cost is, what, minimal
compared to the overall budget? Exactly. Children
account for only 15 % of the total spending.
Their average annual cost is only about $3 ,000
per person. They tend to need preventive care,
immunizations, standard checkups, which are all
relatively low cost. OK, so now contrast that
with the high cost categories. You mentioned
seniors and disabled persons. Right. That population,
the aged and the disabled, they are what drives
the immense costs of the program. I can imagine.
They absolutely do. Even though they only make
up about 21 percent of the total enrollees, they
account for a staggering 52 percent of all Medicaid
spending. Over half the budget for just a fifth
of the people. That's right. Their average cost
per person is substantial over $18 ,000 back
in 2021. And that's because this group relies
on Medicaid for these critical high intensity
services that Medicare or commercial insurance
often just won't cover. Things like chronic disease
management, specialized disability services and
the big one, long term services and supports
or LTSS, which are. incredibly expensive. So
understanding that huge cost distribution is
really the key to understanding why any structural
changes to Medicaid usually involve these really
painful policy battles that center on services
for the aged and disabled. It's always where
the fight is. All right. So let's transition
from the sort of static structure to the dynamic
and often brutal world of policy battles. The
history of Medicaid in the last decade or so
has really been defined by two huge legislative
events. The expansion under the Affordable Care
Act and then the structural changes and cuts
that were proposed in the 2025 reforms. Let's
start with the Affordable Care Act, the ACA,
signed back in 2010. This was intended to be
the primary way to achieve something close to
universal health coverage in the U .S., specifically
by extending Medicaid eligibility. The original
ACA mandate was, I mean, it was truly sweeping.
The idea was to expand coverage to anyone earning
up to 138 percent of the federal poverty level.
And that was regardless of their traditional
category, like whether they had a disability
or were a parent. What was the financial carrot
they offered states to accept this enormous expansion?
The initial federal funding promise was unprecedentedly
generous. The federal government pledged to cover
100 percent of the cost for this newly covered
population. These are the low income, able bodied
adults who never had a path to coverage before.
That 100 percent match would run from 2014 through
2016. 100 percent. So the states paid nothing
for this. group initially. Nothing. And then
that match rate was set to phase down, but only
to a permanent rock solid 90 percent federal
share by 2020 and for all the years after. So
for states that were used to paying 25 percent,
maybe even 50 percent of traditional Medicaid
costs, only having to pay 10 percent for this
huge new population was a massive financial draw.
It was essentially a blank check from the federal
government for states to cover their poorest
residents. But that overwhelming incentive hit
a legal wall in 2012. Yes, it did. The Supreme
Court ruling in NFIB v. Sebelius, the court held
that threatening to withdraw all of the state's
pre -existing Medicaid funding if they refused
the expansion was unconstitutionally coercive.
A huge deal. A monumental ruling. It effectively
stripped the federal government of its enforcement
power and critically made the expansion optional
for states. And that one decision created the
fundamental political divide we still see today.
Many Republican controlled states chose to refuse
the expansion. And that refusal gave birth to
what we call the coverage gap, which is one of
the most, I think, frustrating failures of the
American health system. The coverage gap is.
It's a structural absurdity created entirely
by that Supreme Court ruling. See, the ACA was
designed with these overlapping layers of assistance.
You had Medicaid for the very poorest, which
was intended to go up to 138 percent of the poverty
level. And then you had federal subsidies, tax
credits for private insurance for people above
100 percent of the poverty level. So there was
supposed to be no gap. If a state refused to
expand Medicaid, what happened to the people
whose income fell into that dead zone? You know,
between their state's old stingy eligibility
limits and that 100 percent FPL threshold for
help on the marketplace. They were left completely
stranded. These are individuals who make too
much money to qualify under the old pre -ACA
Medicaid rules, which in some states were incredibly
restrictive. But they made too little money below
100 percent FPL to qualify for any federal subsidy
to buy private insurance. they end up with absolutely
no affordable options. The source material we
looked at gives a really stark example of just
how restrictive those pre -ACA rules were in
some of these states. Can you kind of illustrate
that disconnect? Certainly. Let's take a state
like Kansas before expansion. A non -disabled
adult with children might only qualify for Medicaid
if their income was below 32 % of the federal
poverty level. 32 %? That's practically nothing.
It's incredibly low. And that left this massive,
unaddressed gulf from 32 percent of the poverty
line all the way up to 100 percent, where people
had no medical assistance at all. It's estimated
that over half of the entire national uninsured
population ended up living in these non -expansion
states. It was a genuine public health crisis
created by a policy choice. But on the flip side,
the states that did embrace the expansion, they
saw immediate and profound benefits, right? Undeniably.
The data is crystal clear. Among adults age 18
to 64, expansion states had an uninsured rate
of about 7 .3 percent in early 2016. That was
dramatically lower than the 14 .1 percent rate
found in the non -expansion states. So it cut
the uninsured rate in half, basically. Pretty
much. We saw places like Arkansas and Kentucky,
which historically had some of the highest uninsured
rates in the country, see those rates plummet.
They went from 40 or 42 percent down to 9 or
14 percent in just a couple of years. And there
was a counterintuitive finding about the private
insurance markets in those expansion states,
which I found fascinating. Yes, this is a key
economic insight. Studies found that states that
expanded Medicaid actually ended up with lower
premiums on their private insurance exchange
policies. The expansion acted like a stabilizer
for that private market. How does that work?
Well, by shifting the lower income population,
which on average has higher health risks and
uses more services into Medicaid, the private
insurance risk pool became healthier and more
profitable. So that resulted in lower overall
costs and lower premiums for everyone who was
buying private insurance on their own. It really
did benefit the entire insurance ecosystem. So
if the ACA expansion was this big push toward
more coverage, the political pendulum swung hard
in the opposite direction in 2025 with the signing
of the One Big Beautiful Bill Act. This legislation
focused squarely on structural changes, new eligibility
limits and funding cuts. This act was really
the culmination of efforts by Republican leaders
in Congress who had announced these big goals
of cutting up to $2 trillion from the federal
budget over the next decade. Now, the stated
goal was always eliminating abuse or waste, but
the budget resolution that passed the House proposed
cutting $880 billion from the committees that
oversee both Medicaid and Medicare. And this
act, signed in July 2025, it implemented a lot
of those proposed reductions. The centerpiece
of this effort, and certainly the most contentious
part of the bill, was the mandatory work requirement
for able -bodied adults. What are the specifics
of that mandate? The act mandates that able -bodied
adult enrollees have to work or volunteer for
80 hours per month. That's roughly 20 hours a
week, so half -time employment. And they have
to do that to maintain their Medicaid coverage.
This requirement is scheduled to begin nationwide
in 2027. So what's the projected cost of this
new rule? Not in dollars, but in people losing
their health coverage. This is where the nonpartisan
analysis from the Congressional Budget Office,
the CBO, is particularly significant. The CBO
estimated that the work requirements alone would
lead a staggering 11 million people to lose their
health coverage. 11 million people, that number.
It demands a detailed explanation. Why would
a work requirement cause so many people to lose
coverage, especially when we know a lot of them
are already working? The CBO analysis gives a
very clear reason for this. The primary cause
of coverage loss is not mass unemployment among
recipients. It's complex administrative hurdles,
or what the CBO calls red tape. A lot of those
11 million people either already work enough
hours or they actually qualify for an exemption,
you know, due to a temporary illness or caring
for a family member. But they can't prove it.
They can't prove it easily. Proving that status
every single month, navigating a complex verification
bureaucracy, providing the right documentation,
or just simply misunderstanding the new rules,
it becomes an insurmountable barrier to receiving
care. It's what some people call paperwork poverty.
They lose coverage because of administrative
failure, not because they're unwilling to comply.
And this requirement seems to fundamentally misunderstand
the economics of the core population that Medicaid
serves. It completely ignores the reality of
the working poor. If you look at the Government
Accountability Office data, the GAO, it shows
that roughly 70 percent of Medicaid recipients
already work at least 35 hours per week. They're
already working full time. Yes. They're the working
poor. They qualify because their wages are so
low they can't afford commercial insurance, even
if they work full time. So the work requirement
doesn't actually encourage them to work. It just
adds this substantial administrative overhead
and the risk of a catastrophic loss of coverage
to a population that's already struggling. Beyond
the work mandates, that 2025 act included a bunch
of other provisions aimed at limiting eligibility
and controlling funding. Absolutely. The act
instituted several immediate changes. It requires
recipients who are above the federal poverty
level to pay higher fees for their coverage.
It mandates newer and more frequent verification
requirements, and it significantly increases
the frequency of eligibility checks that states
have to perform on the ACA expansion population,
which just adds to that red tape problem. And
there were some politically charged elements
as well. Yes. Politically, it also prohibits
Medicaid from funding any nonprofits that provide
abortion care. And it bans pharmacy benefit managers,
PBMs, from using what's called spread pricing.
That's a practice where the PBM charges the state
more for a drug than they reimburse the pharmacy.
And then they just keep the difference. What
about on the funding side? I know the act targeted
a specific way that states fund their share of
the cost, these things called provider taxes.
Why were those targeted? This is the kind of
political maneuvering that a well -informed listener
should really focus on. Many states use these
provider taxes. their taxes levied on health
care providers like hospitals or nursing homes,
and then they use that revenue to cover the state's
portion of the Medicaid match, the FMAP. Because
it's easier to tax a hospital than to tax the
general public. It's politically much easier.
So by limiting how states can use these provider
taxes, the 2025 Act makes it significantly harder
for states to meet their required matching funds
without, you know, politically unpopular tax
increases. This puts pressure on them to potentially
reduce services or coverage levels. And finally,
the bill prompted all these claims about removing
undocumented immigrants from Medicaid. What does
the nonpartisan data say about that specific
element? The claims were largely misleading when
it comes to federal Medicaid. Undocumented immigrants
are already ineligible for full federal Medicaid
benefits, with very limited exceptions for things
like emergency medical care. Many of them access
state -funded health programs that operate separately
from federal Medicaid. So what did the bill actually
do? The CBO analysis found that the new federal
provisions primarily risked causing an estimated
1 .4 million people to lose state -level health
coverage. This includes undocumented immigrants,
but it's by effectively pushing states to cut
those non -federal, state -funded programs. So
the net effect is still a loss of coverage, just
not necessarily a purge from the federal Medicaid
system itself. Okay, so if the policy battles
of the ACA and the 2025 Act are the big political
earthquakes, then the actual application process
for an individual is like navigating a bureaucratic
labyrinth of technical and financial rules. Let's
break down the sheer complexity of figuring out
who actually qualifies because it varies so widely
depending on where you live and why you need
help. The complexity starts with this realization
that outside of the ACA expansion, eligibility
is fundamentally categorical, not just based
on income. So you have to fit into a box first.
You have to be a low -income child, a pregnant
woman, a disabled person, a low -income senior,
or a parent of an eligible child. The system
has to see you in one of those categories before
it even looks at your income. Precisely. If you
are a non -disabled, non -pregnant adult without
dependent children, no matter how poor you were,
you historically did not fit a category, and
therefore you were ineligible. The ACA expansion
was so revolutionary because it created a brand
new category, low -income adults, period. Regardless
of parental or disability status, it simplified
the process for millions. And even the income
tests are dramatically different depending on
the category. We have two fundamentally different
systems at play. MAGI and the SSI rules. And
these systems really reflect the philosophical
divide between that new expansion population
and the traditional eligibility groups. The ACA
expansion uses what's called modified adjusted
gross income or MBGI. And this is a crucial simplification
because it standardizes how income is calculated.
It aligns with tax rules. And this is the big
one. It explicitly prohibits the use of asset
or resource tests. So it's just about your income.
It's a clean income metric. It makes the enrollment
process so much smoother. But if you're applying
under one of those traditional categories, if
you're a low income senior or a disabled person
looking for long term care, you face a different,
much more invasive reality. Right. Those groups,
the ones seeking help for the most expensive
kinds of care, they still use eligibility criteria
based on supplemental security income or. SSI
rules. And these rules do include very stringent
asset tests. It's the difference between just
showing a paycheck, which is MAGI, and actively
having to prove financial destitution, which
is SSI. So for traditional seniors and people
seeking long -term care, there's an asset test.
How low is that limit? Typically, it limits your
accountable resources to around $2 ,000 for an
individual in most states. $2 ,000. So if I'm
understanding this correctly, for a traditional
applicant, like a senior, It's not just about
their income. They have to actively impoverish
themselves. They have to spend down their entire
life savings before they can qualify for help.
That is the grim reality of the SSI model. And
the asset test is where the complexity truly
spirals, especially when you're dealing with
long -term care planning. This brings us to the
infamous five -year look -back period. Okay,
what is the purpose of this policy? It was established
by the Deficit Reduction Act of 2005. It's designed
to prevent more affluent individuals from transferring
their assets, giving away their money or their
house, just before they apply for Medicaid nursing
home coverage. If you transfer assets without
getting fair market value in return within the
five years before you apply, you incur a penalty
period of ineligibility. Can you walk us through
how that penalty period is calculated? Sure.
The penalty is calculated by taking the total
amount of assets you gifted away and dividing
it by the average monthly cost of nursing home
care in your state. The number you get is the
exact number of months that you are ineligible
for Medicaid assistance. Okay, so let's use an
example. If an individual gifted, say, $60 ,000
to their kids, and the average nursing home cost
in their area is $6 ,000 a month. That results
in a 10 -month penalty period. $60 ,000 divided
by $6 ,000 is $10 ,000. But here is the absolutely
devastating catch. This is the detail that creates
a severe human crisis. The penalty period doesn't
begin until a person has already spent down all
the remaining assets and drotched below that
strict Medicaid asset limit, which is usually
$2 ,000. Wait, so the senior has to first spend
all their other money, the money they didn't
give away, to hit that $2 ,000 threshold. And
only then does the 10 -month clock start ticking,
so they are simultaneously impoverished and ineligible
for care. Exactly. The policy leaves elders in
this profound state of destitution. They have
zero savings left, yet they are still not eligible
for Medicaid help for a set number of months.
They're left with no way to pay the nursing home
bill. It creates immense hardship for families
and for the providers. It's a policy designed
to discourage asset transfer. But the mechanical
nature of how it works often means the sickest
and most vulnerable are left uninsured and broke
during the exact period they need care the most.
OK, so let's move from who qualifies to who actually
treats them. The second major challenge for Medicaid
recipients is just getting. access to care providers.
And this seems to boil down entirely to the financial
model. Very low reimbursement rates. This is
the operational reality of Medicaid, day in and
day out. In general, Medicaid plans pay providers
significantly less than either Medicare or commercial
insurers pay for the exact same services. The
financial gap is really stark. On average, providers
only get about 67 % of Medicare rates for primary
care and maybe 78 % of Medicare rates for other
services. Which immediately sets up a clear financial
hierarchy. It puts Medicaid patients at the bottom
of the priority list compared to other insured
people. It leads directly to lower provider participation
rates in Medicaid. It just makes business sense.
Why would a highly specialized cardiologist,
for example, accept a Medicaid payment at 67
% of the going rate when they could get substantially
more by treating a Medicare? a private patient.
They have a business to run, and Medicaid often
becomes the payer of last resort, especially
in specialties. The ACA actually tried to fix
this for a little while, didn't it? It did. They
recognized this crisis in primary care access,
so a federally funded provision in the ACA temporarily
increased Medicaid payments in 2013 and 2014.
It brought them up to 100 % of the equivalent
Medicare rates, specifically for primary care.
The goal was to flood the system with accessible
doctors. And what happened? Unfortunately, once
the federal mandate and the funding expired,
most states just chose not to continue the provision.
They let the primary care rates slide right back
down to the lower pre -ACA levels. And beyond
the gap between Medicaid and Medicare, the payments
vary dramatically, even between neighboring states.
This just highlights that tension we talked about
earlier, how state latitude determines the actual
quality of care a person gets. The state -specific
variances are huge. It really reflects that 50
different programs model. The data shows that
the cost and time involved in complex procedures
can depend heavily on your zip code. Take surgery,
for instance. In 2013, the average difference
in reimbursement for 10 common orthopedic procedures
between New Jersey and Delaware was over $3 ,000.
A $3 ,000 difference just for crossing a state
line. Exactly. And these large discrepancies
in payment affect not just patient access, but
they affect where doctors decide to locate their
practices and whether they choose to settle in
a state that has a high Medicaid population.
Let's shift our focus now entirely to the services
that Medicaid offers, the services that make
it such a vital safety net, especially because
they cover areas where Medicare and private insurance
leave these gaping holes. The breadth of Medicaid
coverage is why it is so unique and essential.
It's especially critical for the population that
we call dual eligibles or MediMedis. Who falls
into that dual eligibility category, and how
does Medicaid complement the coverage they already
have? These are people who are eligible for both
Medicare and Medicaid. It's typically low -income
seniors and younger adults with significant disabilities.
We're talking about roughly 9 million people
as of 2013. Medicare covers most of their acute
hospital and medical care, but Medicaid steps
in to cover the essential services that Medicare
generally refuses to pay for. Like what? Well,
prescription drug costs. For one, though, that
changed a bit with Medicare Part D. But most
critically, long -term care. And long -term services
and supports, or LTSS, that is the single biggest
area where Medicaid provides essential coverage
that Medicare doesn't. This is the massive, hidden
social cost of aging in the U .S. That is correct.
And this is why that aged and disabled group
drives half the program spending. Medicaid covers
nursing home care and home and community -based
services for low -income individuals who have
minimal assets. This benefit is explicitly not
covered by Medicare or most commercial insurance,
which usually only covers short -term skilled
nursing care after a hospitalization. What are
the numbers on that? They're massive. Of the
7 .7 million Americans who used LTSS in 2020,
about 5 .6 million of them were covered by Medicaid.
It is the overwhelming primary payer for the
vast majority of long term custodial care in
the United States. The social significance of
that is immense. Without Medicaid filling this
gap, the burden of long term care would fall
entirely on families and individuals. It would
financially destroy them and create massive strains
on family caregivers. Precisely. Medicaid serves
as the functional solution for the long -term
aging crisis in the U .S. It relieves catastrophic
financial pressure from families, but the program
itself then has to carry the entire financial
weight of that $18 ,000 plus per person annual
cost we talked about. Moving to another critical
area, Medicaid is also the largest single source
of funding for mental health services in the
U .S. This is a lesser known but absolutely critical
role. Medicaid covers about 15 million adults
with mental illness. That makes it the largest
single payer for behavioral health services in
the entire country. And it covers a broad and
essential range of services. inpatient hospitalization,
intensive outpatient counseling, mobile crisis
services, even peer support programs, which are
so vital for recovery. And there's a federal
law that actually mandates equality or parity
in coverage for mental health, right? Yes. The
Mental Health Parity and Addiction Equity Act.
It requires that Medicaid managed care plans
provide mental health benefits that are equal
to their physical health benefits. And states
that expanded Medicaid under the ACA also saw
corresponding improvements in access to mental
health care and continuity of treatment. For
example, a 2024 analysis showed Medicaid covered
about 41 % of all psychiatric inpatients in hospitals.
That just demonstrates its central role in acute
care for mental illness. Okay, finally, let's
talk about dental care, which seems to perfectly
illustrate the state -level variation and the
access challenges we've been discussing. Dental
coverage is the perfect example of the program's
bifurcated nature. For children under 21, dental
care is a mandatory federal benefit. It's under
the Early and Periodic Screening, Diagnostic
and Treatment, or EPSDT mandate. And this comprehensive
coverage includes pain relief, restorative care,
and maintenance for dental health. But for adults
21 and older, it's a policy lottery. It is entirely
optional for states. Many states simply do not
offer comprehensive adult dental coverage beyond,
say, an emergency extraction. And even where
the coverage exists, utilization is incredibly
low. Why is that? Given the great need for dental
care among the low -income population, where
access to preventive care has often been non
-existent, why is the utilization rate so poor
even in states that offer it? It circles right
back to that provider participation problem we
discussed. Dentists cite the low reimbursement
rates and the complex administrative requirements
as the primary reasons they don't participate.
In some areas, less than half of active private
dentists participate in Medicaid. This creates
these significant geographic and time -based
barriers to access, even for children who are
legally entitled to comprehensive care. A benefit
on paper is worthless if there's no provider
to deliver it. So we've explored the scale, the
politics, the labyrinthine rules. Now let's ground
this whole discussion in the hard empirical evidence.
What actually happens when people gain Medicaid
coverage? Does the cost justify the investment?
If we move past the political opinions and focus
solely on the empirical studies, the findings
are overwhelmingly positive, especially when
you look at long term outcomes and financial
security. Let's start with the most impactful
result, mortality reduction. The evidence seems
to show Medicaid is literally a life saving investment.
The evidence is conclusive. Multiple peer reviewed
studies link the Medicaid expansion under the
ACA to a substantial reduction in mortality.
And that's driven primarily by reductions in
disease -related deaths because people are able
to access necessary timely care. And this benefit
isn't new. Not at all. It extends throughout
the life cycle, reaching all the way back to
the program's origins. Studies on the initial
implementation of Medicaid back in the 60s and
70s showed it dramatically reduced infant and
child mortality, with a particularly steep decline
for non -white children who previously had almost
no access to consistent care. And the health
effects seen in childhood, they continue to generate
dividends for decades. Yes. This is one of the
most compelling findings from an economic standpoint.
Early childhood Medicaid eligibility reduces
mortality and disability up to 50 years later.
It's also associated with a reduced incidence
of advanced stage breast cancer, which implies
that the increased access leads to earlier detection
and therefore higher survival rates. The investment
really pays off over the course of a lifetime.
This sounds more like a societal investment than
just an expense. Does the government actually
recoup the financial cost of covering a child
in the long run? Absolutely. This is the powerful
economic argument that often gets lost to the
political noise. Studies show that because recipients
of childhood Medicaid are significantly healthier
later in life, they are more likely to be employed,
they earn higher wages, and they're significantly
less likely to need disability transfer programs
like SSI as adults. So the government saves money
later on? It saves money and it makes money.
The government recoups its initial investment
through savings on later benefit payments and,
crucially, through greater lifetime tax revenue.
It earns a discounted annual return of between
2 % and 7 % on the original cost of that childhood
coverage. The program literally pays for itself,
not just in human lives saved, but in fiscal
returns. Beyond survival and long -term tax benefits,
Medicaid has a huge and immediate impact on financial
stability. The evidence on financial security
is robust, and it's immediate. The ACA Medicaid
expansion reduced unpaid medical bills sent to
collection by $3 .4 billion in just its first
two years. It improved credit scores, it prevented
new delinquencies, and it reduced the need for
bankruptcy. And furthermore, the expansion reduced
rates of poverty and severe food insecurity in
certain states. It provides this critical, foundational
level of financial security that allows people
to focus on employment and stability rather than
drowning in medical debt. Which brings us back,
frustratingly, to that 2025 work requirement
controversy. If Medicaid provides this proven
financial stability, how can supporters possibly
justify imposing a requirement that seems designed
to destabilize this population? Well, if we look
at the real world evidence from when work requirements
were tried in states like Arkansas, the results
directly contradict the policy's stated goal.
Studies found the requirements led to a mass
increase in uninsured individuals, soaring medical
debt, and people delaying necessary care and
medications. But did it get more people to work?
Crucially, they found no significant impact on
employment levels. The outcome was a catastrophic
loss of coverage and increased financial distress
for the working poor, not an increase in the
workforce. The political message of personal
responsibility was achieved, but the actual policy
outcome was simply hardship. If we connect this
to the bigger picture, Medicaid's influence extends
far beyond the individual patient. It stretches
into the economy and the political sphere. Let's
look at the financial impact on hospitals, which
so often struggle with the cost of uncompensated
care. The effects on hospitals are not uniform,
but they are incredibly significant. Crucially,
Medicaid expansion boosted the revenue in the
operating margins of rural hospitals. These are
facilities that often struggle the most with
high rates of uncompensated care. Gaining a reliable
payer, even at the lower Medicaid rates, was
a financial lifeline that prevented a lot of
rural hospital closures. But the effect was different
for larger urban facilities. It was mixed. The
expansion had little to no financial impact on
small urban hospitals. And surprisingly, it led
to declines in operating margins for large urban
hospitals. This outcome is likely tied to the
patient mix. Large hospitals saw a shift of previously
commercially insured or privately covered individuals
who might have been paying high deductibles into
the lower paying Medicaid pool. So while it was
great for the patient, it affected the hospital's
overall revenue mix. What's really fascinating
to me is the data that links health insurance
to reduced crime rates. That's a profound connection
that few people would make intuitively. It is
a profound finding, and it demonstrates the holistic
societal best... benefit of stabilizing a population.
Studies found that Medicaid expansion reduced
crime rates, and researchers propose that the
mechanism involves two main factors. First, increased
economic security stabilizes individuals and
families, which reduces financially motivated
crime. And second, greater access to substance
abuse or behavioral disorder treatment helps
address the underlying causes of criminality.
And this effect also starts in childhood. It
does. Extending that timeline, studies found
that Medicaid eligibility during childhood actually
reduced the likelihood of criminality in early
adulthood. It suggests that this early intervention
has massive generational public safety benefits.
And finally, access to basic health care seems
to increase political engagement and civic participation.
Absolutely. Medicaid enrollment is statistically
linked to an increase in political participation,
specifically measured in terms of voter registration
and the turnout. When people's basic health and
financial needs are met, they're more likely
to have the stability, the time, and the resources
to engage as active citizens. This connection
suggests that providing health care can actually
be a mechanism for increasing civic involvement
within underserved populations. Okay, here's
where it gets really interesting. The Oregon
Medicaid Health Experiment. This is maybe the
most famous and ironically the most frequently
misused piece of research in the entire health
care debate. We need to look closely at its methodology
and its complex, nuanced findings. The Oregon
experiment is so significant because it provides
a scientific gold standard for measurement. Back
in 2008, Oregon had limited Medicaid funding,
so they used a randomized lottery system to select
10 ,000 lower -income people for coverage. And
that randomization eliminated selection bias.
The researchers knew that the people who won
the lottery were statistically identical to those
who lost it. This allowed them to accurately
compare the effects of having insurance versus
being uninsured. And the controversial finding,
the one that initially dominated all the headlines,
was the negative data point that opponents of
expansion love to cite. That's right. In the
first two years of the study, researchers found
no significant improvements in measured physical
health outcomes. They looked at key biomarkers,
things like blood pressure, cholesterol levels,
blood sugar control, and they found no measurable
statistical difference between the insured group
and the uninsured group. And that finding was
seized upon by fiscal conservatives as proof
that these expensive government programs weren't
worth it. But that was focusing solely on short
-term physical biomarkers. The study's true value,
the part that proponents cite, came from the
crucial positive findings that proved the program's
immediate value in other fundamental ways. Exactly.
While acute physical health markers might take
much longer than two years to change, the program
was immediately valuable in three key areas that
fundamentally improved people's lives. First,
utilization. The insured group used health care
services far more often. Hospital use increased
by 30 percent, and the number of medical procedures
increased by 45 percent. People were getting
needed, planned care, instead of just waiting
for emergencies. And they were also using preventative
services, which points to huge long -term health
benefits down the road. Yes. The insured population
was much more likely to see preventive care.
Women were 60 percent more likely to get mammograms,
and recipients overall were 20 percent more likely
to have their cholesterol checked. This means
the system shifted from expensive crisis management
to much cheaper, more effective prevention, which
ensures that long -term physical health benefits
are highly likely to show up later. And the mental
health and financial outcomes were starkly and
immediately positive. Those with insurance were
about 10 % less likely to report a diagnosis
of depression. That demonstrates the immediate
psychological relief of having coverage. And
most importantly for quality of life, the study
showed a significantly reduced financial strain.
Insured patients cut in half the probability
of needing loans or having to forego paying other
bills just to cover their medical costs. The
Oregon experiment fundamentally confirmed that
Medicaid provides instant, tangible benefits
in terms of financial security, access to care,
and mental well -being, even if changing longstanding
chronic physical health conditions takes longer
than a two -year snapshot. So what does this
all mean? We've explored Medicaid from its great
society origins, the complexities of the FMAP
system through the ACA expansion battles, right
up to the dramatic 2025 policy shifts. And we've
grounded everything in concrete data. At its
heart, Medicaid is a reflection of the U .S.
approach to poverty and health care access. It
operates under this constant political pressure.
You have one side generally supporting expansion
and comprehensive benefits, while the other side,
as we saw with the 2025 legislation, is focused
on structural cuts, eligibility limits, and cost
control. And the evidence is just overwhelming.
The program has demonstrated its ability to fundamentally
transform lives, increasing employment, reducing
financial strain, decreasing mortality. And yet
the policy focus continually returns to erecting
these barriers to access, as we saw with the
work requirements that threatened to kick 11
million people off their coverage. Despite decades
of research linking Medicaid coverage to profound
long -term positive effects, including the fact
that the government For a program that's been
proven to save lives and improve financial stability,
why does the legislative focus repeatedly shift
to erecting those barriers? And that raises an
important question for you, the listener, to
consider. What does the extreme complexity of
eligibility from... Asset tests for the elderly
that force them to spend down their entire lives,
to the punitive look -back periods for long -term
care, to the burdensome work requirements imposed
on the working poor, what does all that reveal
about the underlying, unspoken philosophy of
public assistance in the United States? It suggests
a system that is constantly justifying its own
existence, forcing the poorest members of society
to prove their need and their moral worthiness
over and over again, regardless of the clear
long -term economic and societal advantages of
simply providing the necessary care.