Medicaid, the joint federal‐​state health care program for the poor, turns 40 this year. It has grown larger than Medicare, the federal health care program for the elderly, and eclipses elementary and secondary education spending in most state budgets. Congress has agreed to trim $10 billion from the federal Medicaid budget over the next five years, a Medicaid Advisory Commission has been created to propose short‐ and long‐​term reforms, and many state legislatures are crafting Medicaid reform plans of their own. Our panelists will discuss the Medicaid cost explosion, Medicaid’s unseen costs and perverse incentives, and possible solutions to the long‐​term care crisis in Medicaid.