Medicaid was created in 1965 under Title XIX of the Social Security Act, as part of Lyndon Johnson’s War on Poverty. It was enacted at the same time the Medicare program was passed.
Unlike Medicare, Medicaid—the brainchild of Congressman Wilbur Mills, the chairman of the House Ways and Means Committee—involved federal funds given to the states to administer their own programs. The federal government set the basic standards for who was covered by the program, and the states could decide if they wanted to broaden the program beyond those standards
Originally, Medicaid categories were defined by welfare recipient status, but this began to change in the mid-1980′s and ceased completely with the passage of welfare reform in the mid-1990′s. Over its his-tory, the Medicaid program has changed from a program to provide health insurance to the welfare population to a catch-all program that provides health and long term care services to around 40 million people at a cost of $170 billion dollars to federal and state governments. As of 2000, Medicaid was the source of health care insurance for one in four American children and covered 40 percent of all births.