DemDaily: What is Medicare and Medicaid?

August 2, 2021

Last Friday marked the 56th anniversary of Medicare and Medicaid, the two government-run, social insurance programs that provide health care to the most vulnerable of our citizens - the elderly, poor and disabled.

For over five decades Medicare and Medicaid have been a critical part of economic security for Americans.

Medicare is a federal program that provides health coverage for those 65 
or older, or who have a severe disability or certain illnesses, regardless of income. 
Medicaid is a state and federal program that provides health coverage for low-income families, 
the disabled, those with long-term care needs, and pregnant women, regardless of age.

(Fiorella Insurance)


Medicaid and Medicare were a part of President Lyndon B. Johnson's Great Society domestic program, which launched in 1964 and focused on elimination of poverty and racial injustice.

On July 30, 1965, Johnson signed The Social Security Act of 1965, which introduced Medicaid and Medicare into law and, for the first time, made health care available to millions of older and lower-income Americans.

Under President Barack Obama's Affordable Care Act (ACA), which was signed into law in March of 2010, Medicaid was expanded to include more preventative services and lower drug costs.

(Saul Loeb/AFP)

The ACA's major provisions came into force in 2014, and by 2016, an estimated 24 million additional Americans were covered by insurance -- in part due to the expansion of Medicaid eligibility.

Under the administration of Donald Trump, however, the GOP tried repeatedly to repeal Obama's landmark legislation, also known as "Obamacare." According to the Congressional Budget Office, Trump's original 2017 "repeal and replace" healthcare reform legislation, the American Health Care Act, would have gutted Medicaid with roughly $880 billion in cuts.

Trump's administration also provided a series of waivers for implementation of Medicaid to states, including limiting enrollment and allowing for imposition of a work requirement barrier between the uninsured and Medicaid.

Since ACA, also known as "Obamacare," was signed into law, 12 states have chosen not to expand access to Medicaid benefits available under the federal insurance program, leaving an estimated four million people without access to coverage. They include Georgia, Mississippi, Tennessee, Alabama, Florida, North Carolina, South Carolina, Texas, Wyoming, Kansas, South Dakota, Florida and Wisconsin.

The week he took office, President Joe Biden signed an executive order to take steps to "strengthen Medicaid and initiate an open enrollment period under the ACA," which Trump refused to do, even after the coronavirus pandemic hit.

(Image: RetireeNews)

Five months later, two million more Americans have signed up for ACA and, under Biden's American Rescue Plan, nine million citizens who buy their coverage through the Affordable Care Act have lower premiums. Four out of five people can now find a quality plan with a premium of $10 or less per month.

Biden's Build Back Better agenda will expand on these efforts, including by adding dental, vision, and hearing coverage to Medicare, closing the Medicaid coverage gap for low-income Americans, and making the premium reductions in the American Rescue Plan permanent.

Medicare & Medicaid: How It Works
Medicare is a single-payer, national social health care program administered by the federal government and contracted private US insurance companies.

It is funded by general revenue and a payroll tax, premiums and surtaxes from beneficiaries who pay into the system. On average, Medicare covers about half of the health care charges for those enrolled.

Today Medicare provides health insurance to approximately 63 million people 65 or older, disabled and youth with illnesses.

Medicaid is a means-tested social health care program that is jointly funded by federal and state governments, and managed by the states.

Each state administers its own program while the federal Centers for Medicare and Medicaid Services (CMS) monitors the state-run programs and establishes requirements for service delivery, quality, funding, and eligibility standards.

Medicaid is the largest source of funded medical and health-related services for US citizens and legal permanent residents, providing free health insurance to more than 74.2 million low-income and disabled people.

"More than a decade after the landmark passage of the Affordable Care Act, as we emerge from a once-in-a-century pandemic, we are on our way to truly making health care a right and not a privilege. I urge Congress to do its part by passing the critical health care reforms in my Build Back Better agenda - and I urge all Americans to get covered today." -- President Joseph Biden 7/15/21
Open Enrollment closes August 15th: Go to to sign up for coverage.
Learn More: Centers for Medicare and Medicaid Services at


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Kimberly Scott

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Sources: CBO, Centers for Medicaid and Medicare Services, White House, HHS, CBS

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