'This Week' Transcript: Vicki Kennedy, Jack Lew and Paul Ryan

STEPHANOPOULOS: And he calls it a tax. I'm going to move on now at this point. The court also ruled that the federal government can't take away a state's Medicaid funding if it refuses to go along with the expansion of coverage. That could affect up to 17 million people who would have been covered by the expansion. And we've already got a lot of governors signaling that they're going to turn down the expansion because of that. That could mean millions fewer covered.

How much does that worry you? And what can you do about it?

LEW: Well, to be clear, the extension of Medicaid coverage for those who can't afford it was upheld, and states are now in a position where the federal government is saying, we will pay 100 percent of the cost of covering those people.

In the 1960s, when Medicaid was enacted with a much smaller federal share, where the state had to actually pay a considerable amount, the states all ultimately came in.

STEPHANOPOULOS: So you think these governors are bluffing when they say they won't?

LEW: In -- in -- in 1997, when the child health program was expanded, still the match was -- required states to pay something, the states came in. It's 100 percent federal. And I believe that the states will come in.

STEPHANOPOULOS: It goes down to 90 percent after several years.

LEW: It goes down to 90 after several years, but it is the most generous federal match in the history of Medicaid. And I think a governor's going to have to answer to their own people. The vast majority of states will come in. For those few that are slow to come in, they're going to have to answer to people why they're turning this down and why they're letting people go without coverage.

STEPHANOPOULOS: Governor Bobby Jindal of Louisiana suggested that perhaps if you make those Medicaid payments a block grant, he would accept the funding. Is that something you can go along with?

LEW: You know, I think that there's been a debate about Medicaid going back many years. We think that it's important to protect Medicaid as something that people have a right to in whatever state they're in, and there have to be some requirements that states meet in terms of who's covered and what's covered. I think this law expands coverage. It's a good thing. And the states should implement it. And I think most states will.

STEPHANOPOULOS: You know, let's turn to the politics a little bit. Individual parts of the plan are still popular, as Vicki Kennedy said, but the overall plan isn't. And that seemed to energized Governor Romney and his supporters. I want to show you something he said on Friday.


ROMNEY: The American people didn't want it in 2010. That's one of the reasons we picked up so many seats in the House and Senate. And -- and I think in the election this November, people who know they don't want Obamacare will have to vote out President Obama. And that's a plus for me.


STEPHANOPOULOS: You see that, he says it's a plus for him. Can President Obama now do what he hasn't been able to do yet and turn it into a political plus?

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