In the early days of Medicaid when it was formed it was considered a safety-net for those who were uinsured, unemployed, and below a certain poverty line to become eligible for 'state aid'. In reality the federal government subsidizes the state-run medicaid system.
While federal and state programs set goals for private insurers in term of quality assurance Medicaid was not required to meet to meet those standards, until very recently. The Affordable Care Act has begun a slow process of improvement.
Moving into a realm usually reserved for health care regulators, Covered California Thursday unveiled sweeping reforms to its contracts with insurers, seeking to improve the quality of care, curb its cost and increase transparency for consumers.