The Gift That Keeps on Giving: Medicaid as a Crucible of Public Goods

Medicaid has been called the "workhorse" of the American health care system, but one would hardly see that in the tenor of political debates. The Program perennially faces political headwinds that at times build to hurricane force with proposals for dramatic structural changes and spending cuts, most recently the draconian cuts enacted by Congress in 2025. In 2024, Medicaid covered more than seventy million Americans, and another ten million were covered by its companion program, the Children's Health Insurance Program. As formidable as these numbers are, the Program's impact runs much deeper, affecting the lives of almost everyone in the United States. It serves as an essential support for the entire health care system and, in doing so, helps to sustain almost every hospital, nursing home, and a range of other providers. This support, in turn, generates population-wide benefits that can be seen as public goods on which everyone relies, whether they realize it or not, that the private sector could not provide. These include peace of mind from knowing there is access to inpatient hospital care, emergency rooms, and long-term care when needed, protection from public health threats, improved health care based on continual innovation, greater social stability, enhanced economic productivity, and reduced health inequities. As devastating as proposals to shrink Medicaid would be for millions of low-income Americans who rely on it for access to health care, these repercussions would cause hardship for almost everyone.This article explains Medicaid's role in sustaining the overall health care system, the nature of the public goods it produces in doing so, and the widespread harm that would be caused were these public goods to be diminished. By characterizing public debates in this way, the Program's supporters could reframe political discourse as a matter of universal self-interest.