Current Medicaid policy should be streamlined to benefit the states. Medicaid is operated jointly by the federal and state governments. Costs for the program are also shared jointly, with states assuming about one-half of the financial responsibility. States encounter difficulty in trying to cope with the administrative and financial demands of the federal government's outdated health care philosophy. Federal restrictions on eligibility often hamper the states' ability to provide services to indigent residents. Interstate differences in eligibility can result in a shift of low-income residents to high-benefit states. Unequal tax burdens and rising Medicaid costs have placed some states in fiscal distress. Clearly, the Medicaid program is ripe for a major overhaul, a task that the federal government has thus far been unwilling to undertake.
From its inception in 1965, the Medicaid program (Title XIX of the Social Security Act) was "relatively ill-designed, its future vague" (Stevens 51). Medicaid became the country's most far-reaching attempt at "socialized medicine." The program's intent was to provide medical services to needy American citizens. Medicaid supplemented the Medicare program (which covered the elderly only) by filling in service gaps for impoverished elderly Medicare recipients.
The philosophy behind the provision of medical services to the poor was that, ideally, the public should be able to pay for medical care from their own pockets much the same as payments were made for other basic necessities such as food, housing, and transportation. The provision of "welfare medicine" such as Medicaid acknowledged the existence of gaps in the private sector's ability to pay: "Undoubtedly, in that system there are gaps, particularly in rural districts and poorer districts in the cities, and we have a very definite interest in trying to fill up those gaps" (Stevens 21).
Despite its intentions, Medicaid lea...