In reality, hiding under the umbrella of the Medicaid program, are many different health care programs. Each serves a different population with its own special needs, and each has its own policy concerns and issues. For example, thirty-six percent of Medicaid payments were made to nursing homes in 1986, part of a long term care program that has expanded in complexity and scope under the home and community-based waivers authorized by the Omnibus Budget Reconciliation Act of 1981. However, at the same time and exemplifying the contrasts within the program, Medicaid is equally a program to provide care in pregnancy and early childhood to the poor. It is also a catastrophic health insurance program for those with unusually large medical expenses that claim most of their income, a Medigap program for the elderly poor who are eligible for Medicare, and an interim insurance plan for some families that experience unemployment.

In this paper, considering just the noninstitutionalized population served by Medicaid, we examine another aspect of the program's heterogeneity. Namely, Medicaid operates a long-term program of health care for two-thirds of its enrollees, but a short-term, stop-gap program for the other third. Whether Medicaid was intended primarily to serve as a permanent source of assistance for a hard core of the needy or as a "safety net” for those experiencing temporary hardships—or both—is not explicit in the statutory eligibility criteria. But then, even Medicaid's extensive long term care program is only the implicit result of its statutory spend-down and medically needy provisions.