CLEVELAND — With a broad overhaul of Obamacare stalled in Washington, one of President Trump’s top health care leaders is drawing the outlines of sweeping changes to Medicaid that could pare enrollments and cut costs without congressional approval.

Seema Verma, director of the federal Centers for Medicare and Medicaid Services, is promising to give states an “unprecedented level of flexibility” to design their Medicaid programs as they see fit. In an appearance in Cleveland this week, she pledged to reduce scrutiny of state requests for waivers from federal rules meant to preserve access and quality standards.

“We want to get to the point where we are making the whole waiver process easier,” Verma said during a discussion at the Cleveland Clinic’s annual medical innovation summit. “We’re not going to tell the states what their priorities are. They are going to come and tell us what their priorities are.”


Underpinning that effort is Verma’s belief that the expansion of Medicaid under the Affordable Care Act was a disastrous move that extended coverage to millions of low-income people who shouldn’t be getting insurance from the government.

“We’ve put more than 10 million people, 12 million people into this program where the doctors won’t see them, and the policies that are in the Medicaid program are not designed for an able-bodied individual,” she said. Verma added that the administration’s goal is to keep those people in the private insurance market, where they would not be “dependent on public assistance.”

Republicans in Congress have sought to roll back the Medicaid expansion in bills to repeal and replace Obamacare, but those efforts have repeatedly failed.

In response, the Trump administration has vowed to dismantle the Obama-era health plan by executive actions, including halting payments to insurers.

Verma’s tack on Medicaid seems to borrow from a similar philosophy — if legislative changes aren’t forthcoming, then administrative actions are a different means to the same end.

Flexibility for states

Before taking the reins at CMS, Verma helped states craft plans that sought to require Medicaid beneficiaries to pay premiums and hold jobs in order to keep their coverage. She is best known for her work on an Indiana plan that requires enrollees to make income-based contributions to a health savings account that’s akin to a premium. Failure to pay means losing benefits or coverage.

In this year’s debate over health care reform in Washington, Verma largely played a behind-the-scenes role to help rally support for efforts to repeal the Affordable Care Act and its Medicaid expansion. Her comments in Cleveland, while not formal proposals, offer a glimpse into her plans to alter the program administratively and reshape the federal-state partnership that controls its funding and operations.

Verma was interviewed on stage at the innovation summit by Fox News correspondent Geraldo Rivera. The clinic’s chief executive, Dr. Toby Cosgrove, also participated in the discussion. In response to questions, Verma articulated a point-by-point plan for reforming Medicaid, starting with a move to allow states to alter the rules of participation in their programs without a lengthy bureaucratic process in Washington.

“Imagine you’re trying to run this program that is the number one program in your state in terms of costs, and every time you want to make a change you have to go check in with the federal government and see what they think,” Verma said.  “To me it starts with resetting that [relationship], so that states are actually in control of their program and making those decisions.”

Those changes could have huge financial impacts on hospitals that have accepted federal reimbursement cuts in exchange for broader coverage of low-income patients. Cosgrove, who is retiring from his chief executive role at the end of the year, appeared to push back gently on Verma’s comments.

“I’d love to have the flexibility coming out of Washington,” he said. “I think the one thing we have to be careful of is that we don’t want 50 different health care programs across the country. Ultimately, we need to experiment. We need to figure out what we can do well, [devise] a plan, and get it applied across the country in an even-handed way.”

Other Medicaid specialists who were not in the room said granting more leeway to states can undermine access to care by allowing them to pare enrollment or erect barriers to patient care.

“The federal rules are in place to make sure basic access and quality standards are met,” said Julie Donohue, director of the Medicaid Research Center at the University of Pittsburgh. “The devil is really in the details in terms of how much additional flexibility to give to states and whether we start to get concerned about those basic minimum federal standards being met.”

Verma also floated the idea of putting states on a “Medicaid scorecard” to measure their performance, similar to how her agency measures the performance of hospitals on specific quality measures.

“The Medicaid program delivers over half the babies in the U.S.,” she said. “We should be able to say, ‘Well, how many of them were in the NICU? How many of them were delivered to … moms that smoked?’ We should be able to answer those questions, and we should be able to talk about the results of our programs.”

Lastly, Verma said, state Medicaid programs must be put on a budget to prevent costs from continuing to rise. “We’ve seen these programs grow and grow and grow,” she said. “We want to make sure we have a stable program over the long term and make sure that there’s some type of a growth rate that we can all agree to.”

That change, favored by Republicans in Washington, would require legislative approval, but the GOP has so far failed to amass enough support for it. Verma said it is a crucial part of her efforts to overhaul the program. “Once we agree to some sort of a budget for the Medicaid program, that actually starts the pathway of flexibility and states being in control,” she said.

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  • One of the largest cost to any state is the Medicaid budget line that pays to keep frail elders safe and comfortable in nursing homes. Here in CT the state program pays anywhere from $3,000 to $4,000 per month per patient to skilled nursing facilities.

    As a former geriatric care manager I witnessed the “trick” that middle and upper middle class families use to make sure that the taxpayers pay these charges and not the patient. Protected by rules made in the CT Legislature these families use Elder Law attorneys to protect assets from being recovered to support frail elders in their later years. The more frequent method is deeding the home to children 5 years or more before needing Medicaid help.

    What bothers me is that often these children are quite comfortable already, having a paid up mortgage and, maybe a summer place too, and now they have Mom’s house as well while we sustain Mom using our tax dollars. How about closing up this loophole for starters.

    Leave the rest of the CT program alone. It works.

  • “How many ( babies on Medicaid) were delivered to moms who smoked?” Huh? Because if Mom smoked, it’s her fault if something’s wrong, so make that baby pay the price? And if theses people should be getting insurance through the private market, how the hell are they supposed to pay? And why is that extra profit for the insurance companies so important? Also, any time I hear about “flexibility ” I know it’s a code word for “less money will be available and insurance companies will also be freer to rip people off with scrappy policies”.

  • Of course, we know which states will use this super flexibility to cut their rolls, those where Medicaid is most needed. Ms. Verma is short-sighted: yes, the State may save money, but the health of the people will suffer. Also, who will wind up paying for those necessary hospital stays? You and I, through higher insurance premiums.

  • The entire reason someone is on Medicaid, is because they cannot afford private health insurance. It has no bearing if they’re “able-bodied” or not. How does she intend these people find the money to pay for their insurance? Thievery? Prostitution? Seriously – how?

    • She expects them to get a job. Medicaid was put in place to provide health care for people with severe disabilities that keep them from being able to work.

  • Another example of this administration’s penchant for putting someone opposed to the fundamental mission of an agency in charge of the agency. How many health care services could have been provided with the consulting fees she collected from her efforts to weaken a vital program and shame those who need it? People like Ms. Verma are simply soulless. What a constant slap in the face to those who work to advance a basic level of decency.

    • So true, their proposal would be akin to moving from a defined benefit plan to a defined contribution plan. “Out of Medicaid money for the year Nevada? Well, too bad so sad, guess you should get your people to be less sick.” !?!?!? I want to say I can’t believe these people, but I work in state public health and I stopped being shocked at rationing proposals a long time ago. :-/

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