How Medicaid Works
One of the touchiest aspect of the House and Senate healthcare reform bills was the proposal to cut federal funding to Medicaid. To understand why this had so many people in both parties up in arms, you need to understand how the program itself works and what it does.
Medicaid is a public health insurance program specifically for needy and low-income Americans. It's jointly funded by individual states and the federal government. Medicaid is an entitlement program; benefits are guaranteed by federal law to pregnant women, children, disabled people, and the elderly, if they meet certain income limits. States have the option of extending coverage to other residents, such as families with children whose household income was slightly above the federal income limit. About 74 million people are currently receiving Medicaid benefits.
Source: Fool.com