WASHINGTON — Medicaid embarked on a massive transformation Wednesday — from a safety-net program for the most vulnerable to a broad-based one that finds itself at the front lines of the continuing political and ideological battle over the Affordable Care Act.
Already the nation’s largest health-care program, Medicaid is being expanded and reshaped by the law to cover a wider array of people.
Among them will be many who consider themselves middle class — people such as Sandy Kush, who initially bristled when she learned she would be joining a program she had always thought of as being only for the poor.
“Maybe it’s like a shame thing. I was raised middle-class. I own my house. It just seems like not me,” said Kush, 49, an unemployed medical transcriptionist in Naperville, Ill., who said she would have preferred to buy a private health plan with the help of a federal subsidy.
On Wednesday, people who have signed up for coverage under the new law became eligible to receive it, in what supporters have hailed as a historic moment for health care in the United States.
So far, more than 2 million Americans, many previously uninsured, have enrolled in private health plans, thanks in large part to new federal subsidies for low- and middle-income people to buy coverage. Their difficulties in navigating the system since its rocky launch Oct. 1 have dominated the headlines.
A far greater number — about 3.9 million — took steps in October and November to sign up for Medicaid, according to federal figures. That includes people who became eligible for the state-federal program under the expansion as well as those who could have enrolled previously, but for one reason or another did not sign up until now.
Although the Medicaid expansion has gotten less attention in recent months, it remains a flash point. The issue has split the nation in half and has become a proxy for the broader debate over the role and responsibilities of government.
Twenty-five states and the District of Columbia expanded Medicaid under the Affordable Care Act. In many of those places, the program will be open for the first time to anyone whose income is below 138 percent of the poverty level — individuals making less than $15,856 a year or a family of four earning under $32,499 in 2013 dollars. That includes childless adults, who were excluded in most states despite a widely held misperception that all poor people automatically qualified for Medicaid.
“The big change is that it really is going to operate the way most people thought it did,” said Judy Solomon, a Medicaid expert at the Center on Budget and Policy Priorities, a think tank focused on policies affecting low- and moderate-income people.
The newly eligible in these states come from many strata of society: homeless people, former inmates, low-paid workers, recent college graduates, retirees not yet old enough for Medicare and people like Kush, who are between jobs.
In the states that rejected the expansion, Medicaid will largely remain limited to groups of people who traditionally have been covered by the program: children, pregnant women, very-low-income parents and the poor elderly and disabled.
Even in states that aren’t expanding Medicaid, there are some significant changes, including new Medicaid eligibility standards. For people who are not in long-term care, the program will no longer take into consideration how much participants have in assets, such as savings or retirement accounts.
Medicaid already covers about 16 percent of the U.S. population — more people than Medicare, the federal health program for people 65 and over. That includes 31 million children, nearly 9 million disabled adults under age 65 and more than 4.6 million low-income seniors.
It finances 40 percent of all the births in the United States and is the largest source of coverage for Americans with HIV and AIDS. More than 60 percent of those living in nursing homes are covered by Medicaid.
Supporters of the health-care law say that expanding Medicaid is a critical part of the effort to reduce the ranks of the uninsured and will build acceptance for a program that has been stigmatized since its inception in 1965 as essentially a fringe benefit for those on public assistance.
“Medicaid — for all the good we think it does, and it does do a lot of good — it does have a connotation,” said Matt Salo, executive director of the National Association of Medicaid Directors.
Rep. Henry Waxman, D-Calif., one of Medicaid’s leading champions in Congress, said that as a result of the expansion, “we’ll see a whole lot of grateful Americans, and a whole lot more support for Medicaid, in areas where it has traditionally been scorned as a poor people’s program.”
But critics say the growth of the program will merely foster government dependency.
“I think it is very bad social welfare policy,” said Edmund Haislmaier, a senior research fellow at the Heritage Foundation. “You are taking people who are by and large young, healthy and perfectly capable productive members of society and encouraging them to become dependent on public assistance. This is the very last population you want to do that for.”
Medicaid was created as part of the same law that established Medicare. States were given the option to participate. Within seven years, all had joined except Arizona, which did not climb aboard until 1982.
Although states were required to cover certain groups such as low-income children, they traditionally have had broad leeway in running their programs.
Because of its roots as a welfare program, Medicaid has long had an image problem. In the past, states that have expanded the program have felt compelled to re-brand it — as BadgerCare in Wisconsin, for example, and SoonerCare in Oklahoma.
President Barack Obama and many Democratic lawmakers initially resisted the dramatic Medicaid expansion that became part of the Affordable Care Act. But it turned out to be significantly less expensive than providing federal subsidies to lower-income people to buy private health insurance through the state and federal exchanges.
The law, as enacted in 2010, required all 50 states to expand Medicaid to reach the goal of extending coverage to 30 million uninsured Americans over the next decade.
But the Supreme Court ruled in June 2012 that states could not be compelled to expand their programs. Because so many states rejected the expansion, the Congressional Budget Office estimated in 2012 that 6 million fewer would enroll in Medicaid over the next decade than initially expected.
Today, the Medicaid expansion, more than any other aspect of the Affordable Care Act, demonstrates the nation’s red-blue divide. States that are led by Democrats have rushed to embrace the Medicaid expansion, as have a small number of states governed by Republicans.