Trump nominee for health programs signals changes ahead - USA TODAY

WASHINGTON – As governor of Indiana, Mike Pence created an alternative Medicaid program he hoped could be a national model for revamping the joint federal and state health care program for the poor.

On Tuesday, the architect of Pence’s program, which requires participants to make monthly contributions, was tapped by President-elect Donald Trump to head the agency which oversees the Medicare and Medicaid programs.

If confirmed, Seema Verma is expected to grant even more latitude to states in crafting Medicaid programs.

The Obama administration, for example, has not allowed states to require work as a condition of Medicaid eligibility and has limited penalties Indiana can impose on recipients who don’t make their required monthly contribution.

“Pence and Trump have made a big deal about giving the states more flexibility and autonomy in managing their Medicaid programs and she would appear to be the perfect person, given her expertise, to manage that rollout of more state flexibility,” said Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm in Alexandria, Va.

Len Nichols, a health policy professor at George Mason University, called Verma

“very knowledgeable, and very conservative.”

“(She’s) maybe (the) best combo we could hope for, given how (the) Rust Belt voted,” he said in an email.

Other health care experts worry about what Trump’s choices of Verma as head of the Centers for Medicare and Medicaid Services and Georgia Rep. Tom Price as Health and Human Services secretary will mean for the federal health care programs which Republicans argue need more fiscal controls.

“Those who are concerned about the health and well-being of Americans who rely on Medicaid and Medicare should brace themselves for tumultuous times ahead,” wrote Joan Alker, executive director of the Georgetown University Center for Children and Families.

In addition to being in charge of Medicare and Medicaid, Verma would also oversee the federal health exchanges set up by the Affordable Care Act for people who don’t get insurance through a government program or an employer.

Laszewski said that’s not an area of expertise for Verma, but she will have to focus on it because the exchanges are on shaky ground and the Trump administration has to make sure the wheels stay on until they pass a replacement system.

“That’s going to be a huge issue for her,” he said. “Do they want the market to explode and take the blame for it prior to the 2018 elections?”

Verma could also face a big challenge in adjusting to the large bureaucracy at CMS. Verma’s Indianapolis-based consulting firm. SVC Inc., employs only about a dozen people. CMS employs about 6,000 people.

“She has no experience running an organization. Her job has been on the sidelines as a consultant lobbing these things in,” said Deb Minott, a former secretary of the Indiana Family and Social Services Administration under Pence. “She’s a completely untested person when it comes to running an organization even close to that size.”

But Minott, and others, praised Verma’s knowledge of Medicaid.

“She is a wizard with finances and dealing with all kind of fiscal issues associated with Medicaid,” said Pat Miller, the longtime former chairwoman of the Indiana Senate’s Health and Provider Services Committee. “She will be a real asset as people look for ways to change the Obamacare health plan.”

Doug Leonard, president of the Indiana Hospital Association, said Verma is “smart, dedicated and has a truly transformational vision for health care.”

Verma declined an interview request.

In Trump’s statement announcing the pick, Verma said she looks forward to helping him “tackle our nation’s daunting healthcare problems in a responsible and sustainable way.”

After receiving a master’s degree in public health from Johns Hopkins University, Verma was hired by the Marion County Health and Hospital Corp. to work on a health plan to assist low-income patients at Indianapolis’ public hospital, then called Wishard.

“The greatest thing about having that experience at Wishard is that it was a hands on experience,” said Mitch Roob, who hired Verma. “It wasn’t an ivory tower kind of thing. We were able to understand what kind of products might work for that population.”

Roob would later work with Verma on the initial version of Indiana’s alternative Medicaid program developed under Gov. Mitch Daniels.

“Low-income Hoosiers were the first in the nation to experience real consumer-driven healthcare,” Daniels said in a statement. “I expect she will serve our nation with excellence as administrator of CMS."

After Pence succeeded Daniels, he hired Verma to develop an expanded version of the Medicaid program that would qualify for federal funding under the Affordable Care Act.

“In time, people will come to see that we’re not expanding traditional Medicaid,” Pence said as he sought the Obama administration’s approval. “We’re reforming traditional Medicaid.”

Indiana didn’t get all the freedom it asked for in creating the Healthy Indiana Plan 2.0.

“Gosh, do you think they’re going to get everything they want now?” Laszewski facetiously asked.

And Indiana appears to have run out the clock with an ongoing fight with the Obama administration over how to evaluate the version that was approved.

GOP State Rep. Ed Clere, who chaired the Indiana House’s Public Health Committee at the time of the rollout, said the jury is still out on whether the program’s personal responsibility requirements improve health outcomes.

“It’s important to keep in mind that HIP 2.0 is a three-year demonstration project and we’re just now nearing the end of the second year,” said Clere, R-New Albany. “So there’s a lot of evaluation that still needs to be completed before anyone draws final conclusions.”

Judy Solomon, vice president for health policy at the liberal leaning Center on Budget and Policy Priorities, said there’s already evidence that HIP 2.0 is keeping some eligible low-income people from enrolling and some enrollees from getting the care they need. She also questions how the personal accounts recipients contribute to can be serving as the hoped-for incentive for personal responsibility when a survey of recipients found fewer than half knew they had one.

“It’s hard to claim success if people don’t even know they had them,” she said.

Price has proposed converting Medicaid to a block grant, which would give states a set amount of money for their programs in exchange for greater freedom in running them. Because Price’s proposed annual spending increase is less than Medicaid’s projected growth rate, funding could be one-third less in 10 years than it would have been without changes, according to the Center on Budget and Policy Priorities.

While such a major change would have to go through Congress, a Trump administration could immediately begin giving states a freer hand on Medicaid by granting more rules waivers.

Alker, with the Georgetown center, expects the new administration to test what the law allows.

“We are going to see a lot of questions being raised about what you can and cannot waive in the Medicaid statute,” she said. “But in general…I do think that we will see some potentially far reaching changes contemplated to Medicaid that will erect more barriers to coverage, and in some cases very punitive barriers.”

Laszewksi said GOP-controlled states in particular are likely to seek changes.

“This could really give us an opportunity to see some competition between blue and red states in the way they manage their Medicaid programs,” he said.

And the blueprint for many of the red states could be Indiana.

“I think what this means,” Miller said, “is that the federal government will look to Indiana as having a leading position in coming to terms with changes to Obamacare.”