Trump pick to run Medicare, Medicaid has red-state policy chops

President-elect Donald Trump has tapped Seema Verma, a health care consultant, to head the Centers for Medicare and Medicaid Services. That’s the part of the Department of Health and Human Services that oversees Medicare, Medicaid, and the Children’s Health Insurance Program and has a budget of just under a trillion dollars in 2016.

Verma comes to the job with extensive Medicaid experience. Her consulting firm, SVC, Inc., worked closely with Indiana Gov. Mike Pence to design Indiana’s Medicaid expansion under the Affordable Care Act. The expansion, known as the Healthy Indiana Plan or HIP 2.0, went into effect early last year, and Verma’s involvement may be important as Congress and the Trump administration, including the vice-president elect, make decisions on the future of the ACA.

Indiana’s unique Medicaid expansion was designed to appeal to conservatives. HIP 2.0 asks covered people to make a small monthly payment to access health insurance. A missed payment can result in a six-month lockout from insurance coverage. Those provisions aren’t allowed under traditional Medicaid, but Indiana got special permission from CMS to implement them through a waiver.

Other Republican-led states such as Iowa, Ohio and Kentucky, have contracted with Verma’s firm to help submit their own Medicaid expansion proposals to the federal government that also include conservative provisions such as asking recipients to pay for some of their care, or requiring them to work or be actively looking for work.

Susan Jo Thomas, who heads the Indiana insurance advocacy group Covering Kids and Families, said Verma’s contributions to HIP 2.0 made Medicaid expansion possible in a Republican state. “She understood that in order to get expansion in this state,” she said. “It’s more about what is palatable, what can get approved.”

Nearly 410,000 people are members of HIP 2.0, according to the latest data from the state.

But HIP 2.0 has its critics. David Machledt, a policy analyst with the National Health Law Program, which advocates for health care for low-income individuals, argued that the cost-sharing provisions or if a person is temporarily removed from Medicaid actually reduce participation in the program. “Early evaluations show that a lot of people don’t understand this plan and don’t understand the incentives in it,” he said. That means people end up not getting the health care they need.

Nevertheless, Machledt said if Medicaid expansion continues, Verma’s pick to head CMS could mean that proposals similar to Indiana’s may be more likely to be approved.

Joan Alker with the Georgetown Center for Children and Families agrees, and finds it worrisome. “It is a good thing that she has experience with Medicaid, and it is a positive that Governor Pence worked with Ms. Verma to advance a version of Medicaid expansion,” she said. “But I think if you look at the totality of the Trump administration’s picks today — Congressman Price as well as Ms. Verma — this represents potentially a very damaging and chaotic restructuring of the Medicaid program.” Price has advocated severely cutting Medicaid funding, and Alker worries that cuts and more stringent requirements under Verma mean people will lose the health insurance.

“The Healthy Indiana Plan has occurred in the context of generous federal funding,” she said. “And I think some of that is on deck to go away.”

But Verma may be a smart pick, said Indiana Rep. Charlie Brown, the ranking Democrat in the state’s public health committee. “She is a smooth operator, and very, very persuasive,” he said. Brown worked in opposition to Verma in crafting the Healthy Indiana Plan, but said she worked effectively across party lines to incorporate the Pence administration’s wishes into the program.

“She’s very resourceful and intelligent,” said Brown. “But the question now becomes, ‘What will be her marching orders as they relate to Medicare and Medicaid?’ ”

Verma’s role in shaping Indiana’s health care policy has had some controversy. According to a 2014 report from The Indianapolis Star, she has received millions of dollars from the state through her work with the Indiana government. She was also paid by Hewlett-Packard, a Medicaid vendor that received more than $500 million in state contracts. Government ethics experts told the Star the arrangement presented a conflict of interest.

Verma did not immediately respond to requests for comment, nor did Gov. Pence’s office.

This story is part of a reporting partnership with NPR, Side Effects Public Media and Kaiser Health News.

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