Welfare Reform: A Matter of Justice Medicaid. It is the United States Federal Government program to aid states in providing health care to the poor and impoverished who otherwise could not receive proper medical care. In 1995 the federal government spent a total of $77.4 Billion on Medicaid. This is up almost 300 percent from $20.1 Billion in 1984, only 10 years earlier. In the same 10 years state spending on Medicaid rose over 250 percent from $16.5 Billion to $58.2 Billion. Under the current Medicaid programs, Medicaid spending will increase at an annual rate of 10 percent, to an es