Medicaid has become the nation's most important health coverage program, covering more individuals and costing more than Medicare. Because Medicaid finances the health care for society's most challenging cases, it deserves the characterization: “the workhorse of the U.S. health care system.” A chief difficulty is that the program is housed within state governments, which means its fiscal fate is tied to the well-being of state economies. State revenues tend to decline just when health care spending and Medicaid spending reach their highest points. States have numerous strategies they employ to reduce the rate of growth in Medicaid spending, though none have strategies to halt relentless cost pressures. The policy challenge today is to survive this difficult period with the least damage to vulnerable individuals, families, and safety net providers.