How Does Medicaid Work

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assurance santé is the foundation of America’s health care system. It provides millions of people with affordable coverage and helps them get the preventive services and prescription drugs they need to live longer, healthier lives.

Whether or not health reform is successful, Medicaid will remain key to the future of U.S. health care, providing subsidized coverage through new marketplaces (exchanges) and an individual mandate that requires most people to obtain health insurance or pay a penalty. Our “Medicaid Works” series is designed to inform the public debate about this vital health policy tool.

Before President Johnson signed the legislation establishing Medicaid in 1965, poor families relied on charity care or went without treatment. Today, millions of low-income children, parents, and pregnant women rely on it, making it possible for families to see doctors and get the help they need.

States have also used Medicaid’s flexibility to shift more long-term support and service needs out of nursing homes and into home and community-based settings, where they can be more effective and cost-efficient. These programs are having lasting benefits: Children eligible for Medicaid due to eligibility expansions in the 1980s and 1990s were likelier to complete high school and college, research shows; and they are more likely to have employment-based health insurance and pay taxes as adults, studies suggest.

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