MARY LOUISE KELLY, HOST:
The Trump administration announced a plan today to allow states to start getting block grants for Medicaid, Medicaid being the program for low income and disabled Americans. This is a longtime conservative goal. And here to walk us through what this announcement means is NPR health policy reporter Selena Simmons-Duffin.
SELENA SIMMONS-DUFFIN, BYLINE: Hi.
KELLY: So I want to make sure I understand how Medicaid is set up now. Give me your best Medicaid primer, 30 seconds, go.
SIMMONS-DUFFIN: OK. So it is a huge health insurance program. Over 70 million people are enrolled. That includes low-income adults, children, disabled people. That works out to be 1 in 5 Americans in this program. Right now, beneficiaries have a right, an entitlement to whatever care they need for however long. And funding is shared between states and the federal government. So there is a formula based on the per capita income in a state. Poor states get more. And it's totally open-ended. So if there's a recession or a natural disaster, a new drug that's really expensive, states have to pay more for their Medicaid, but so does the federal government.
KELLY: OK. So today, the announcement that came from the head of the agency that runs Medicaid - this is a woman named Seema Verma. And she announced a waiver. States can apply for it. How was that going to work?
SIMMONS-DUFFIN: OK. So Verma called this healthy adult opportunity. She's really emphasizing how some beneficiaries wouldn't be affected - children and people with disabilities. This focuses on adults who are under age 65 and enrolled in Medicaid.
So how it works is states apply for this waiver to get this block grant. If approved, they'd get a capped budget from the feds for that population. And in return, they would have more flexibility to run the program. They could make changes to benefits. For example, they could limit the drugs that are covered. Right now, Medicaid covers all drugs.
Oklahoma's governor, Kevin Stitt, was there with Verma today. He says he's going to apply for this and called it a game-changer. And he talked about how this would allow him to charge premiums and add work requirements for adults and Medicaid. He said this could be, quote, "a trampoline to their future."
KELLY: (Laughter) OK. That's a memorable image. So this announcement came this morning. What has the reaction been? Are other states onboard?
SIMMONS-DUFFIN: So it's not clear if other states are going to apply besides Oklahoma. Washington state, for one, tweeted out that it was a hard pass. But some states are going to be interested. And critics were really quick to jump in here and say that this is not a good idea. It's not a good plan for states. One example of a group that came out against this was the American Academy of Pediatrics, which put out a statement that it is, quote, "baffling and alarming that such drastic harmful changes are being proposed to a program that works so well."
Critics have started to paint this as a threat to the safety net. And some pointed to Puerto Rico, which actually does already get a block grant for Medicaid and has had many natural disasters. And there, what they've had to do is cut benefits and cut provider payments, which has caused doctor shortages. And folks are pointing to that as a cautionary tale.
KELLY: But how big a deal is this change going to be? It's optional for states.
KELLY: It wouldn't change Medicaid for everybody who uses the program. So is this transformational?
SIMMONS-DUFFIN: It might be. I mean, it depends, as I just said, in terms of what states do with it, how many states apply. But it is actually a really big deal to be changing Medicaid at all. This idea of block grants has been on the table for a really long time. I mean, it was talked about in the Nixon era. Almost - it's almost as old as Medicaid, and it has always been passed over. So it's a big deal for the Trump administration to finally get it done without Congress.
But polling suggests that Medicaid is really popular, even in red states. Idaho, Utah and Nebraska were some of the latest to expand Medicaid by popular vote, which is a pillar of Obamacare. So it may be politically risky for the Trump administration to be doing this in an election year - and legally risky, too. It will almost certainly be challenged in court.
KELLY: That is NPR health policy reporter Selena Simmons-Duffin.
SIMMONS-DUFFIN: Thank you.
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