Trump’s pick for key health post known for punitive Medicaid plan


Seema Verma, the president-elects choice for Centers for Medicare and Medicaid Services administrator, pushed lockout periods for low-income people

Seema Verma, Donald Trumps choice to head the two largest public health insurance programs in the US, is a conservative darling who has introduced work requirements and lockout periods for impoverished recipients into the medical safety net in three states.

A close adviser to vice-president-elect Mike Pence, Verma Trumps nominee for administrator of the Centers for Medicare and Medicaid Services (CMS) made her name devising Indianas Medicaid plan, one of the most punitive in the country.

Medicaid is a public health program that ensures Americas poor and disabled have health insurance. Obamacare dramatically expanded the program, which now serves more than 73 million people.

The unique requirements Verma and her consultancy firm SVC Inc designed for Indiana require that the destitute in that state have skin in the game by paying premiums, even if they were just $1.

In Kentucky, her company developed a plan to require the poor to perform work activity, which could include unpaid community service, in order to receive health insurance. Approval of that plan is still pending at the CMS, the agency she could soon lead.

In Ohio, a plan designed by Vermas company and rejected by the current leaders of CMS required people with low incomes to be barred from public health insurance until all premium arrears were up to date.

Her plans were about saving the dollars by any means possible, said Indiana Representative Charlie Brown, the ranking Democrat on the public health committee.

As a consultant in each state, Verma was the driving force in designing Indianas HIP 2.0 public insurance plan for the poor, and is highly regarded in conservative circles because of its emphasis on personal and fiscal responsibility.

Though her plan expanded Medicaid to nearly 400,000 Hoosiers, she has argued that new recipients are able-bodied enough to not need the same set of policy protections as the aged, blind, or disabled. Instead, Vermas plan forces recipients to pay up to 2% of their income to premiums, held in a system similar to tax-free accounts available to commercial plans.

It is a plan meant to mimic the commercial market, as a financial lesson for its recipients. It remains one of the most complex and punitive Medicaid expansions in the country, an outlier in a system of state-run safety nets largely free for the poor.

Further, it is built on the back of the Affordable Care Act, a law that her potential future boss, Congressman Tom Price, explicitly opposes. Trump has nominated Price to be health secretary.

Shes a hired gun, said Brown, who described his interaction with Verma as intense and daily. Thats what she was in Indiana, thats what the administration wanted to save dollars, and so she comes up with masterful plans. By 2014, Vermas small company had secured $3.5m in state contracts with Indiana.

She is often described as a behind-the-scenes Republican operative. Regarded as smart and talented, she is also considered single-minded and conservative. She is a registered Republican, and recently agreed to participate in the leadership network of the American Enterprise Institute, a rightwing thinktank.

Her father, Jugal Verma, 77, described her as someone with passion for her work, and sympathy for the poor. Each morning on her way to work, he said, she pulled her car to the side of the road to hand the same homeless man cash. It used to amaze me, he said.

She grew up in a Democratic household. I am a staunch Democrat, said Jugal Verma, discussing his daughters work in the deeply conservative Pence administration. She doesnt do anything if she doesnt believe in it.

Tom Price is poised to be the next US health secretary. Photograph: Jim Lo Scalzo/EPA

She and Price, if he is confirmed by the Senate, will be charged with helming a more than $1.1tn budget dominated by public health programs for the very poor, disabled and elderly. Medicaid alone covers more than 73 million Americans, nearly one-quarter of the American population. Neither Verma nor a Pence spokesman replied to a request for comment.

Vermas best known work used a little-known provision of federal health law to push conservative ideas through despite the Obama administration. The strategy made her an influential consultant to Republican state administrations.

In Indiana, for example, some of the most controversialprovisions of the states law were pushed through using this obscure 1115, or eleven-fifteen, waiver. While Obamas administrator of the Centers for Medicare and Medicaid Services did not approve all of Vermas plans a punitive provision developed with Ohio was denied some were successful. Others are still pending the approval of an agency she may soon run.

One example of a provision in Indiana, which I think is very severe, burdensome, and in fact does not promote the objectives of the Medicaid program, [is] if someone [cant pay premiums], they get kicked off the program, said Andrea Callow, a policy analyst at Families USA, a not-for-profit organization focused on consumer health.

Premiums are typical of commercial insurance plans they require beneficiaries to make a monthly payment. But Medicaid recipients typically do not pay premiums because their incomes are so low. The Medicaid expansion carried out under Obamacare allows people to earn a salary of about 138% of the poverty level, about $16,000 for an individual, and remain eligible.

In Indiana, if people on Medicaid earning between $11,000 and $16,000 dont pay their premiums, they can be locked out of the program for up to six months, a provision even commercial insurance does not impose.

If someone cant scrape up the money for premiums for two months, they get dis-enrolled, and they get locked out for six months, said Kallow. Then say they get cancer, they get hit by a truck, they have an accident. They have absolutely no place to turn for health coverage.

Kentuckys 1115 waiver, on which Vermas company SVC also consulted, proved equally complex and even more controversial. The state asked CMS to allow Kentucky to impose work requirements beginning three months after benefits began, something no state in the country requires as a condition of Medicaid.

Kentuckys new expansion proposal has work requirements, said Kallow, Theres even sort of unpaid community service, which is very troubling.

After three months, able-bodied adults of working age would need to participate in a work activity for at least five hours per week. After one year, that requirement would increase to up to 20 hours per week. If that requirement were not met, the state could end the persons benefits.

There seemed to be a paralysis of analysis as it relates to the downtrodden, those who are in the greatest needs, said Brown.

During a public comment period on Kentuckys 1115 waiver, 90% of the 1,700 comments received were negative. Analysts also contend that such requirements mean building a new, large bureaucracy just to track whether Medicaid beneficiaries are complying.

I have no problem with the personal responsibility features to the extent that they improve outcomes, said Ed Clere, former Republican chair of the Indiana House public health committee. One of the big questions going forward, both for Indiana and now for the country, will be: is there a link between these personal responsibility features in the way of financial participation and improved healthy outcomes?

I havent seen any evidence.

However, even critics said portions of the plan designed by Verma improved services. The fact that a voluntary, Obamacare-sponsored Medicaid expansion took place at all in Indiana, a deep red state, had a huge impact in the eyes of many serving poor patients there. Another 19 states still have not expanded Medicaid, even though Obamacare pays for 90% of expansions.

I have insurance, my child is sick, I take her to the doctor, said Lauren Lamb, outreach coordinator at a chain of north-west Indiana health clinics, HealthLinc. I dont think about it, but when you see people that dont have that coverage … they worry if their kid is sick, if they can even take them to the doctor.

The change, Lamb said, comes when patients realize they are eligible for health insurance they can afford.

You see them, and they leave, and theyve got tears in their eyes, because they cant believe how lucky they feel that day. It just sits in your heart.

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