The Public Health and Welfare Act contains a significant portion of federal health care law. It focuses largely on the Department of Health and Human Services (DHH), which is the main federal agency devoted to health protection and services, particularly for those who are most vulnerable. The DHH has more than three hundred programs, including the National Institutes of Health (NIH), which conducts and funds medical research, and the Centers for Medicare and Medicaid Services, which direct the Medicaid and Medicare programs that provide medical care to those who are elderly, disabled, or poor. Of the nearly $700 billion annual budget of the DHH, the Centers for Medicaid and Medicare Services receive close to $500 billion dollars. Medicaid and Medicare each provide health coverage to over 40 million individuals.

Medicaid, which seeks to assist low-income individuals, is a federal program funded by both federal and state funds, but is administered by the states alone. States regulate the delivery of health care services under the program. Individuals may only receive Medicaid if they meet the conditions for eligibility promulgated by the state in which the individual resides; therefore, not all people with low incomes qualify. State criteria for Medicaid may include factors such as pregnancy, blindness, or disability. Eligibility may also depend upon the individual's age, income, assets, resources, or lawful immigration status. Several states have their own separate programs that provide medical care for low-income persons who do not qualify for Medicaid.

Although state law determines eligibility and distribution of Medicaid services, some federal law limits state discretion. For example, federal law forbids states from reducing welfare benefits based on the receipt of Medicaid services. Federal law allows states to require residency in a state in order to qualify for its Medicare services; however, states may not restrict benefits based on citizenship or employment status. Additionally, federal law criminalizes fraudulent Medicaid claims by recipients and providers.

Medicare differs from Medicaid in that Medicare is an actual insurance program. It is federal health insurance made available to people over age 65. Additionally, Medicare is available to persons under 65 possessing certain disabilities, and for all people with end-stage renal disease (kidney failure). Medicaid encompasses insurance coverage for hospital and medical services. Most people must pay a monthly premium for the medical services portion of Medicare. An optional Prescription Drug plan, for which most people must also pay a monthly premium, covers prescription medication.