A primary reason for this wealth redistribution is known as the Federal Medical Assistance Percentage (more commonly referred to as FMAP). The Medicaid program is funded by both federal and state dollars through a matching structure. The federal government usually matches state spending on an open-ended basis, using the FMAP, which is determined annually for each state using a formula that compares the state’s average per capita income level with the national average income level. Thus, high income states like New York, which pay a disproportionate share of Federal taxes get a lower Federal match for its Medicaid program. [A summary of the FMAP is found at the National Health Policy Forum and a list of state FMAPs is found at StateHealthFacts.org]
So the important question to ask is not whether "spreading the wealth" is good but rather "whose wealth is being spread to whom?" One tends to get better answers that way.