NCPA - National Center for Policy Analysis


August 2, 2005

The expansion of Medicaid to cover the working poor has fundamentally broadened the nation's safety net and changed the lives of low-wage workers in the United States. It also has put enormous strain on federal and state finances and made taxpayers the health insurance provider for millions of workers, says USA Today.

The success of welfare reform in moving people off of cash assistance and into low-paying jobs has, for better or worse, moved the nation a step closer to a government-run national health care system, says USA Today:

  • Medicaid spending has soared 85 percent since 1997, to $295 billion last year.
  • The program's growth has outstripped that of Medicare, the government insurance program for seniors.
  • Medicaid enrollment surpassed Medicare's in 2001 and it now covers 5 million more Americans.

Many states now spend more on Medicaid than anything else, including education. Tennessee and Missouri recently scaled back Medicaid coverage. But, overall, state legislatures largely have protected and expanded Medicaid spending, even during the recession earlier this decade. One reason: Every $1 in state spending on Medicaid generates an average of $1.44 in federal matching money.

Without saying so directly, the Republican-controlled Congress has retooled Medicaid from a program that helps mostly the poor and disabled into one that tackles the issue of working Americans who don't have health insurance, says USA Today.

"This is not a mistake. It was the explicit intent of Congress to expand coverage to working families," says Ron Haskins, co-author of the book Welfare Reform and Beyond. "The original sin of social policy was tying Medicaid directly to welfare. Now, it's tied to working."

Source: Dennis Cauchon, "Welfare reform opens Medicaid to millions," USA Today, August 2, 2005.


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