ROBERT SIEGEL, HOST:
One idea that Republicans frequently mention as a cost-savings reform to Medicaid is to change it to what is called a block grant program. Medicaid funds health care for Americans with low incomes. It's funded jointly by Washington and by the states, and it's administered by the states.
Well, several governors of both parties have expressed concern about the consequences of block granting. The thinking is that Medicaid would change from an entitlement of health coverage to people at specific income levels to an extension of assistance to as many people as could be covered by a fixed amount of money.
One Democratic governor who opposes that change is Terry McAuliffe of Virginia, who joins us now. Welcome to the program.
TERRY MCAULIFFE: Robert, thanks for having me.
SIEGEL: In Virginia, the Republican legislature successfully opposed you on expanding Medicaid eligibility under the Affordable Care Act. But now, I gather, Republican legislators agree with you that Washington should not block grant Medicaid. Why? What's so bad about a block grant?
MCAULIFFE: So let's go to the issue - if you block grant us now - Virginia has a very efficient Medicaid system today. A lot of them say, well, if you block grant it, you can get rid of the inefficiencies. We already have the efficiencies. And what will happen, it will strap our state budget. It will reduce benefits. It will limit choices. And when people think of Medicaid, you know, they think it's poor, minority families. I mean, that's what a lot of people think. In the case of Virginia, it is those individuals with disabilities, and it's elderly.
SIEGEL: Yeah. But what I hear you saying is that if the block grant program - if that were to happen and if current federal contribution levels were the starting line, then you think Virginia would be penalized for being relatively efficient at the way that it runs Medicaid nowadays.
MCAULIFFE: We would be horribly disadvantaged because we have a very efficient system. We have, obviously, one of the lowest - unfortunately, one of the lowest eligibility rates in the country right now. I think for a woman with two children, the dollar amount is 30,000. So it's not like that we could go in and cut. We are already at the bare bones. What if prescription drug prices go up? We have no ability then. Or we'd have to do it solely from the state to increase those benefits. Or if - let's assume, Robert, we head into a recession or the stock market goes down dramatically. More people qualify to go into our limited Medicaid program. We, the state, have to absorb those costs.
SIEGEL: Do you accept that whatever Washington has to do with administering Medicaid costs some money and if there were block grants, there would be some reduction in federal overheads to this program?
MCAULIFFE: I'm sure. Sure, there would be some reduction. But in fairness, they are still going to have to have the folks in Washington to oversee the money that's being shipped out on a block grant. So I'm not sure, at the end of the day, that they do save much on administrative.
But the other big concern for Virginia and those other what we call non-expansion states, what is the threshold number they're going to use for block grants? We forfeit, in Virginia, $2.4 billion a year in Medicaid expansion that we did not take. Well, how about those 31 states that did take the expansion money, is their block grant number going to be the expansion number and their other number?
SIEGEL: So if I understand you, what you're saying is that if the Trump administration honors the principle that nobody who got coverage under the Affordable Care Act should lose it and that includes - let's say that is held to include the Medicaid expansion...
MCAULIFFE: Yeah.
SIEGEL: ...Then in fact, states that took the expansion would get larger block grants from Washington than states like Virginia that didn't.
MCAULIFFE: They will lock in the expansion number that they took. As I say, in Virginia, we have forfeited, unfortunately, 2.4 billion a year. So I do think the Republicans in my legislature who have fought me from day one on expansion are now realizing if President Trump moves ahead with this basic block grant with - in not including - the non-expansion states, not including that expansion number, you have really crippled Virginia's economy. It puts us in such a dire strait, and I think that's what the Republicans here have finally realized - that they really could have hurt themselves.
SIEGEL: That's Terry McAuliffe, the Democratic governor of Virginia. Governor McAuliffe, thanks for talking with us.
MCAULIFFE: Robert, thank you, sir.
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