AYESHA RASCOE, HOST:
President-elect Donald Trump has promised to extend his 2017 tax cuts when he takes office again. And that means, depending on how budget rules are interpreted, he may have to find a way to make up for the lost revenue. One possible solution proposed by conservatives, change how Medicaid - the taxpayer-subsidized health insurance program for low-income Americans - is funded. Trump said he would, quote, "take care of Medicaid and other popular social programs on the campaign trail." But some Republican lawmakers have identified the program as a prime target for savings. Joining us to explain is Robin Rudowitz of KFF, a health policy research and journalism organization. She is vice president and director for the program on Medicaid and the uninsured there. Welcome to the program.
ROBIN RUDOWITZ: Glad to be here. Thanks for having me.
RASCOE: So Medicaid costs taxpayers about $800 billion a year, with the federal government covering about three-quarters of that cost and states covering the rest. Can you give us a sense of what that money buys?
RUDOWITZ: Sure. Medicaid provides coverage to about 1 in 5 people in the United States, about 4 in 10 children. Medicaid also covers 41% of all births in the United States, as well as half of children with special health care needs. It's also a big source of coverage for individuals who have any mental illness, as well as individuals with HIV.
RASCOE: Republican lawmakers have proposed that Washington give states block grants to cover the federal share of Medicaid costs. How is Medicaid funded now? And how would block grants change that?
RUDOWITZ: So Medicaid financing is pretty complex, but right now states get a guaranteed match from the federal government for spending on the program. And that funding can change if demand goes up or if cost goes up, that financing is guaranteed for states, and it's - it is adjusted. So during economic downturns, for example, costs and demand might go up, and that funding is variable.
Under a block grant, states would get a set amount that would not be variable based on economic conditions or enrollment in the program. And the block grants to generate federal savings would be set at lower amounts than what is currently expected. So states would be sort of left holding the bag for making up these excess dollars, so they would have to make hard decisions. They might have to raise revenue if they wanted to maintain their programs, or they might have to cut coverage if they were not able to make up the lost federal dollars.
RASCOE: One argument for block grants is that they would force states to administer their programs more efficiently. Is there a lot of waste, or is fraud a big problem for Medicaid?
RUDOWITZ: Well, right now, states do pay for their share of the financing for the program, so they also have an incentive to make sure that the program is run efficiently. And states have adopted a number of efforts to impose cost savings and be stewards of the program.
RASCOE: Medicaid also ensures some working-class Americans who earn too much to qualify for the program normally - but they're enrolled through Obamacare or the Affordable Care Act. KFF did some research on what would happen if cuts targeted this Medicaid expansion piece. What did you find?
RUDOWITZ: That's right. So if there were changes to both the matching - so how much the federal government pays for that coverage - there could be significant implications for states' ability to continue to provide that coverage. And without the Medicaid expansion coverage, many individuals would otherwise not have access to affordable coverage. So it would likely mean an increase in the number of people without coverage or the increase in the number of uninsured.
RASCOE: Your organization's own polling has shown that most Americans - even most Republicans - have a favorable opinion of Medicaid, and Republicans only have small majorities in the House and Senate. So how do you expect this debate to play out?
RUDOWITZ: Well, I do think that changes to both the expansion piece of the Medicaid program, as well as broader cuts to the Medicaid program, will run up against the fact that there are many people covered by the program. A lot of individuals, again, with special needs - so children with special health care needs or people who need nursing home care - really rely on the program. Our polling does show that two-thirds of adults in the U.S. say that they have some type of connection to the Medicaid program. So either they, themselves, or a close friend or family member are connected to the Medicaid program. And as you mentioned, three-fourths of the public also have favorable views of the program, and that is true across political parties. So these changes to the program will have or could have major implications for coverage for states and state budgets, as well as, you know, run-up against public support for the program.
RASCOE: That's Robin Rudowitz. She is the vice president and director for the program on Medicaid and the uninsured at the health policy organization KFF. Thank you so much for joining us.
RUDOWITZ: Thank you for having me. Transcript provided by NPR, Copyright NPR.
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