History Of Medicaid Program

3 Pages 752 Words

History and Development of Social Welfare System (Medicaid)

The severe Depression of the 1930’s made Federal action a necessity, as neither the States

and the local communities, nor private charities had the financial resources to cope with the

growing need among the American people. Beginning in 1932, the Federal Government first

made loans, then grants, to States, to pay for direct relief and work relief. After that, special

Federal emergency relief and public works programs were started. In 1935, President Franklin D.

Roosevelt proposed to Congress economic security legislation embodying the recommendations

of a specially created Committee on Economic Security. There followed the passage of the Social

Security Act, signed into law August 14, 1935.

This law established two social insurance programs on a national scale to help meet the

risks of old age and unemployment: a Federal system of old-age benefits for retired workers who

had been employed in industry and commerce, and a Federal- State system of unemployment

insurance. The choice of old age and unemployment as the risks to be covered by social

insurance was a natural development, since the Depression had wiped out much of the lifetime

savings of the aged and reduced opportunities for gainful employment. The Act also provided

Federal grants-in-aid to the States for the means-tested programs of Old-Age Assistance, and Aid

to the Blind. These programs supplemented the incomes of persons who were either ineligible for

Social Security (Old-Age and Survivors Insurance) or whose benefits could not provide a basic

living. The intent of Federal participation was to encourage States to adopt such programs.



The law established other Federal grants to enable States to extend and strengthen

maternal and child health and welfare services, and these grants became the Aid to Families with

Dependent Children program, w...