In a 4/5/2012 Fox News OpEd, Avik Roy discusses "Medicaid's Cruel Status Quo".
As he notes, Medicaid patients have theoretical "coverage", but often lack ability to receive actual care. Even worse, ObamaCare "doubles down" by expanding Medicaid as its vehicle for increasing "coverage", thus making current problems worse.
Roy offers more details in his policy paper, "The Medicaid Mess: How Obamacare Makes It Worse".
Eventually, Medicaid can and should be privatized. Proposals such as "block grants" to states could be a helpful intermediate step, if they eventually lead to complete privatization. But ultimately, in a fully free society those who need medical care but cannot afford it should rely on private charity.
(Fortunately, in a fully free society health care costs would also be much lower, thus enabling many to afford basic care.)