The act replaces the Old Age Assistance program created under the Social Security Act, and is a compromise in response to many years of debate over the creation of a national healthcare system. Some states already provide significant support for the elderly, while others provide very little. This federal act seeks to build a compromise by making eldercare a responsibility for all states. In particular, it is passed to support those not covered by other programs, including people who do not meet standards for being low-income but who could still become impoverished by hospital bills and are therefore at risk of becoming "medically indigent."

While the programs created by the act will not be fully implemented in every state, the passage of the act will create infrastructure that then shapes future social service programs. Many states with large Black populations and segregated hospitals will refuse to participate in order to resist desegregation.