Politics & Government

Trump’s pick to lead Medicaid and Medicare has hazy legacy on insuring the poor

Seema Verma, President Donald Trump’s pick to head the embattled Medicaid program, is a rising policy star among Republicans for helping states inject conservative policies into the nation’s largest public health program.

In Indiana, however, where she helped craft the state’s controversial Medicaid expansion experiment, dubbed “HIP 2.0,” Verma’s legacy is not so clear.

Hailed as a model of political compromise and harpooned as a troubling move toward penalizing the Medicaid program, the “Healthy Indiana Plan” is viewed as a template for the kinds of program changes that Verma would champion if she becomes administrator of the Centers for Medicare & Medicaid Services.

But ethical concerns have been raised about Verma’s dual role as a Medicaid consultant for Indiana and other states while she was under contract to one of the nation’s largest Medicaid contractors.

An Associated Press investigation found that Verma’s consulting firm, SVC Inc., made millions in fees from at least nine states while she also had a contract with Hewlett Packard, which processes state Medicaid claims. The arrangement raises questions about whether Verma – through her policy decisions and recommendations – unduly prioritized the interests of the company while working on behalf of taxpayers.

Through a spokesman, the AP reported, Verma has denied any conflict of interest and has agreed to sell her Indianapolis company to Health Management Associates, a Lansing, Michigan, firm, within three months of confirmation.

At her confirmation hearing Thursday before the Senate Finance Committee, Verma’s ethical concerns might take a back seat to questions about her philosophy for managing Medicare and Medicaid.

As the architect of Indiana’s Medicaid expansion program, Verma required newly insured participants earning up to 138 percent of the federal poverty level to pay premiums for coverage – sometimes as low as $1 or $2 per month – so they have “skin in the game” and develop greater personal responsibility for their health care.

“Seema has very strong feelings about ownership and that people don’t really value programs unless they have some contribution, however minimal it may be, to the program,” said Susan Jo Thomas, executive director of Covering Kids and Families of Indiana, a nonprofit group that works to expand health coverage.

But if participants miss payments, they could receive lesser coverage or be barred from coverage for six months – even if they pay them back. Supporters say those kinds of rules apply in the private market and Medicaid recipients should face the same requirement. They also claim the rules will prompt people to seek preventive care and be better health care consumers.

“But there’s no peer-reviewed data that’s ever been published that actually proves that any of those ideas actually hold water,” said Dr. Robert Stone, a medical doctor and director of Hoosiers for a Commonsense Health Plan, a grass-roots group that supports a publicly financed, single-payer health plan at the state and national level.

Although a state-commissioned evaluation of the HIP 2.0 program gave it high marks, Stone questioned the report.

“I don’t read in this thing about any data that supports these, I think, farfetched ideas about ‘skin in the game’ and ‘personal responsibility,’ ” he said.

It costs more administratively to collect such small premiums than they generate in revenue, Stone said. He called the rules “window dressing and conservative red meat” that make the program more bureaucratic and expensive to administer “along with being cruel.”

The ideologically driven rules are just “bad health policy,” said Joan Alker, executive director of the Center for Children and Families at Georgetown University in Washington.

“Forcing people to remain uninsured for six months is too high a price to pay for missing a deadline,” Alker said. “This is a population that by definition has fallen on hard times. So (there’s a greater) likelihood of them missing a payment because of unemployment, administrative errors or residential instability because many are homeless or near homeless. These kinds of issues are real barriers.”

Others, however, credit Verma with getting former Gov. Mike Pence and Indiana Republican lawmakers to accept the Medicaid expansion in a red state that was reluctant to do so.

The bottom line: 420,000 Indiana residents have health coverage that didn’t have it before HIP 2.0, said Thomas, of Covering Kids and Families of Indiana.

“We have been extremely happy with the HIP 2.0 program,” Thomas said. “It has been a real godsend for us. It does have some parts of the program that we were uncomfortable with, maybe initially, but it was important for us to get on board because we saw this as a big win with the few losses. In other words, it was worth getting three-fourths of a loaf of bread instead of being without bread at all. We’ve made adjustments and been able to acclimate to this change.”

Thomas’ organization helps plan members who get locked out of coverage be reinstated. She estimates that about 20 percent of recipients have had problems with the lockout provision either through their own doing or administrative errors, “but those are exceptions.”

“The majority of people are finding a way to negotiate through the system” and retain their coverage, Thomas said.

Verma’s Medicaid expansion ideas could be moot if Republicans move to repeal the Affordable Care Act and pull federal funding for the program. Similar funding issues would surface if Medicaid’s funding formula moves to block grants or per capita caps.

Currently, the federal government pays a share of each state’s Medicaid spending – anywhere from 50 to 80 percent – with no limit on total costs.

If approved by Congress, “block grants” would give states fixed amounts of federal dollars each year to run Medicaid. Per capita caps provide funds for each eligible beneficiary, but only up to a specified amount.

House Speaker Paul Ryan, R-Wis., and new Health and Human Services Secretary Tom Price have backed block grants for Medicaid. The Trump administration has signaled its support as well.

But it’s unclear which direction Congress will go in its plans for repealing the Affordable Care Act and funding Medicaid.

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