M

edicaid could be in for a major overhaul.

President-elect Donald Trump’s pick to lead the federal Centers for Medicare and Medicaid Services is the architect of Republican-led efforts to cut the program’s costs at the state level and require some beneficiaries to get jobs and pay for a portion of their own care.

Seema Verma, president of a national health care consulting company, is best known for her work in Indiana with Vice President-elect Mike Pence, whose gubernatorial administration reshaped Medicaid by requiring recipients to pay premiums and tracking their compliance with healthy behaviors.

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Her selection to lead CMS is likely to provoke strong reactions from Democrats and advocates of universal coverage and the Affordable Care Act who argue that her reforms have restricted access to medical services. Trump also selected Republican Congressman Tom Price of Georgia, a fierce critic of Obamacare, to be secretary of Health and Human Services.

He called Price and Verma a “dream team” to help him repeal and replace Obamacare and reform other health policies after he takes office in January.

The selection of Verma is likely to embolden state proposals to cut Medicaid costs and institute changes that require low-income people put more “skin in the game,” as many Republicans have said, regarding their health care and medical expenses. It could also bolster Republican-led efforts to pare Medicare spending and shake up coverage options for millions of Americans.

Verma has worked in the trenches of health care policy for more than 20 years. She helped launch Indiana’s Medicaid reform package in 2007 and became especially influential following the 2010 passage of the Affordable Care Act, which allowed states to significantly expand their Medcaid programs to cover more low-income residents.

Many states led by Republican governors took advantage of the expansion — and its influx of federal aid — but wanted to institute reforms to help control the program’s costs and encourage people to engage in healthier behaviors and get off government assistance.

The Healthy Indiana Program created savings accounts for recipients, which works in a similar fashion to commercial insurance plans, by requiring them to make premium-like payments and more carefully budget their use of health services.

A blog post Verma co-wrote said the program “respects the dignity of each member by setting a fair expectation of personal investment and engagement in his or her own well-being. Contributions are a way for members to demonstrate personal responsibility, but they also encourage members to stay engaged with their health plan.”

Health care providers in Indiana supported the reform proposal because it included raises from Medicaid — an average of 20 percent for hospitals and 25 percent for doctors. The state’s hospital association released a statement this morning applauding Verma’s “truly transformational vision for health care.”

“She also deeply understands the critical importance of coverage to those served by programs like Medicare and Medicaid, and is a superb choice” to lead CMS, the statement said.

Her proposals, while criticized by some Democrats, have also drawn ire from some Republicans who argue they do not go far enough to cut spending. With the Affordable Care Act still picking up the tab for Medicaid expansion, the exact financial impact of Healthy Indiana on the state’s coffers remains unclear.

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As president of SVC, Inc., the consulting company she founded, Verma also helped to craft Medicaid waiver proposals in Iowa, Ohio, Michigan, and Tennessee.

She has also worked on a highly controversial reform package in Kentucky, where the state’s governor wants to require people with incomes below the federal poverty level to pay premiums. The proposal would also require beneficiaries who aren’t primary caregivers to work or get job training. Both the premiums and work requirements have been opposed by the Obama administration.

But Verma’s selection to head CMS will quickly change Washington’s posture toward Kentucky’s proposal and many others that seek to rein in spending. It could also have much broader implications for federal efforts to accelerate performance-pay for doctors, a plan implemented under Obama that aims to tie doctor compensation to the quality of patient outcomes.

Those changes, instituted through the law known as MACRA, have achieved bipartisan support in Congress, and could be accelerated under the Trump administration. Verma’s stewardship of CMS will also affect how hospitals are rated and reimbursed for their care, as well as the kinds of penalties they might face for falling short of federal quality benchmarks.

 

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