Medicare and Medicaid are two federal health insurance programs created by the United States government in 1965 through amendments to the Social Security Act. Medicare is a federally administered program providing health coverage primarily to Americans aged 65 and older, as well as to certain younger individuals with disabilities or end-stage renal disease. Medicaid is a joint federal-state program providing health coverage to low-income individuals and families, with eligibility criteria and benefits varying by state. Together, the two programs cover roughly one-third of the U.S. population and constitute a major share of federal and state government spending.

Both programs were enacted on 30 July 1965, signed into law by President Lyndon B. Johnson as part of his Great Society agenda. The legislation passed amid broader political debate over the government's role in financing medical care. Prior to 1965, most elderly Americans lacked health insurance, and private insurers often declined to cover high-risk populations. For more on the legislative and political history, see Medicare and Medicaid - History, which is linked from United States of America - History.

Medicare is divided into distinct parts. Part A covers hospital inpatient care, skilled nursing facility stays, hospice, and some home health services. Part B covers outpatient care, physician services, and preventive services. Part C (Medicare Advantage) allows beneficiaries to receive benefits through private insurance plans under contract with the federal government. Part D provides prescription drug coverage. Medicare is funded primarily through payroll taxes, general revenues, and beneficiary premiums.

Medicaid covers a broad range of services including hospital and physician care, long-term care, behavioral health services, and prescription drugs. The federal government sets minimum requirements, but states have significant flexibility to expand eligibility and benefits beyond those minimums. The Affordable Care Act of 2010 offered states the option to expand Medicaid to adults with incomes up to 138 percent of the federal poverty level; as of 2025, 41 states and the District of Columbia have adopted the expansion, though a number have not. Federal Medicaid funding is provided as an open-ended matching grant, meaning federal contributions increase as state spending rises.

Program costs have grown substantially since 1965. Medicare and Medicaid together account for a significant portion of the federal budget and are frequently cited in discussions of long-term fiscal sustainability. Cost drivers include an aging population, rising healthcare prices, expanded eligibility, and increased utilization. The programs are administered by the Centers for Medicare and Medicaid Services (CMS), an agency within the Department of Health and Human Services.

Medicare and Medicaid are subjects of ongoing policy debate across a range of dimensions. Questions concerning program solvency, the appropriate scope of benefits, the role of private insurers, price negotiation with pharmaceutical companies, and the federal-state funding structure are regularly contested in Congress and in policy literature. Supporters of expanded government involvement argue the programs provide essential coverage to vulnerable populations that markets would not adequately serve. Critics argue the programs distort healthcare markets, inflate costs, and impose unsustainable long-term fiscal burdens on government. More detailed treatment of these competing positions is available on the Medicare and Medicaid - Debate page.

The question of whether the United States should transition to a single-payer system - often termed “Medicare for All” - has become a prominent political issue, with advocates arguing it would achieve universal coverage and reduce administrative costs, and opponents contending it would require large tax increases, reduce provider choice, and diminish innovation. See Medicare for All - Debate.

There is broad empirical agreement among health economists that Medicare and Medicaid have substantially increased healthcare access for their target populations relative to pre-1965 baselines. There is also general agreement that both programs face long-term fiscal pressure due to demographic and cost trends. Consensus on normative questions - what the programs ought to cover, who ought to be eligible, and how they ought to be financed - does not exist. See Medicare and Medicaid - Health Economics Consensus for a summary of areas of empirical agreement.

• Expand and protect - Proponents of this view hold that Medicare and Medicaid represent necessary public commitments to healthcare access, should be defended against cuts, and ideally expanded. See Expand and Protect Viewpoint.

• Reform and restrain - Proponents of this view hold that the programs are fiscally unsustainable in their current form and should be restructured - for example, through block grants, means-testing, or premium support models - to reduce costs and increase market competition. See Reform and Restrain Viewpoint.

• Single-payer replacement - Proponents of this view hold that Medicare and Medicaid should be replaced or absorbed into a universal single-payer system. See Single-Payer Replacement Viewpoint.

• Privatize and deregulate - Proponents of this view hold that government programs crowd out private insurance markets and that greater reliance on market mechanisms would reduce costs and improve quality. See Privatize and Deregulate Viewpoint.

• Medicare and Medicaid - History
• Medicare and Medicaid - Debate
• Medicare and Medicaid - Health Economics Consensus
• Medicare for All - Debate
• Affordable Care Act
• Social Security
• United States Healthcare System
• United States of America - History

1. Social Security Amendments of 1965, Pub. L. 89-97, 79 Stat. 286 (30 July 1965).
2. Centers for Medicare and Medicaid Services, “Medicare Program - General Information,” CMS.gov (accessed 2025).
3. Centers for Medicare and Medicaid Services, “Medicaid Program Information,” CMS.gov (accessed 2025).
4. Congressional Budget Office, The Long-Term Budget Outlook (Washington, D.C.: CBO, 2024).
5. Henry J. Kaiser Family Foundation, “Status of State Medicaid Expansion Decisions,” KFF.org (accessed 2025).