Final answer:
The Deficit Reduction Act provides governors with the flexibility to design Medicaid benefits tailored to their state's needs, reflecting the federal-state partnership of the program established in 1965 and aimed at assisting low-income individuals.
Step-by-step explanation:
The Deficit Reduction Act gives governors more flexibility to design Medicaid benefits that efficiently and affordably meet their states' needs.
Medicaid is a joint health insurance program created by Congress in 1965, which is a collaboration between the states and the federal government. Each state is responsible for administering the program and has the authority to determine the level of benefits and eligibility. The program provides medical insurance for low-income individuals, including those under the poverty line, with an emphasis on families with children, the elderly, and the disabled. Given the financial burden on state budgets due to healthcare costs covered under Medicaid, the Deficit Reduction Act aimed to mitigate these pressures by granting states greater latitude in structuring their Medicaid benefits to be both effective and financially manageable.