Trump Picks Seema Verma To Run Medicare And Medicaid

President-elect Donald Trump unveiled two big health care decisions Tuesday.

He picked Rep. Tom Price to head the Department of Health and Human Services and tapped Seema Verma, a health care consultant, to head the Centers for Medicare & Medicaid Services. That's the part of HHS that oversees Medicare, Medicaid, and the Children's Health Insurance Program and has a budget of just under a trillion dollars in 2016.

Verma comes to the job with extensive Medicaid experience. Her consulting firm, SVC, Inc., worked closely with Indiana Gov. Mike Pence to design Indiana's Medicaid expansion under the Affordable Care Act. The expansion, known as the Healthy Indiana Plan 2.0, went into effect early last year, and Verma's involvement in it may prove important as Congress and the Trump administration, including the Vice-president elect, make decisions on the future of Obamacare.

Indiana's unique Medicaid expansion was designed to appeal to conservatives. HIP 2.0 asks covered people to make a small monthly payment to access health insurance. A missed payment can result in six-month lockout from insurance coverage. Those provisions aren't allowed under traditional Medicaid, but Indiana got a federal waiver to implement them.

Other Republican-led states, such as Iowa, Ohio and Kentucky, have contracted with Verma's firm to help submit their own Medicaid expansion proposals to the federal government that also include conservative provisions such as asking recipients to pay for some of their care, requiring them to work or to be actively looking for work.

Susan Jo Thomas, who heads the Indiana insurance advocacy group Covering Kids and Families, says Verma's contributions to HIP 2.0 made Medicaid expansion possible in a Republican state. "She understood that in order to get expansion in this state, it's more about what is palatable, what can get approved," she says.

Nearly 410,000 people are members of HIP 2.0, according to the latest data from the state.

But the Indiana approach has its critics. David Machledt, a policy analyst with the National Health Law Program, argues that provisions like denying coverage for a certain period of time or charging copays reduce participation. "Early evaluations show that a lot of people don't understand this plan and don't understand the incentives in it," he says. That means people end up not getting the health care they need.

Nevertheless, Machledt says, if Medicaid expansion continues, Trump's pick of Verma pick to head CMS could mean that proposals like Indiana's may be more likely to be approved.

Policy analyst Joan Alker, with the Georgetown Center for Children and Families, finds it worrisome. "It is a good thing that she has experience with Medicaid and it is a positive that Gov. Pence worked with Ms. Verma to advance a version of Medicaid expansion," she says. "But I think if you look at the totality of the Trump administration's picks today — Congressman Price as well as Ms. Verma — this represents potentially a very damaging and chaotic restructuring of the Medicaid program." Price has advocated severely cutting Medicaid funding, and Alker worries that cuts and more stringent requirements under Verma would mean people will lose the health insurance.

"The Healthy Indiana Plan has occurred in the context of generous federal funding," she says. "And I think some of that is on deck to go away."

But Verma may be a smart pick, says Indiana Rep. Charlie Brown, the ranking Democrat in the state's public health committee. "She is a smooth operator, and very, very persuasive," he says. Brown worked in opposition to Verma in crafting the Healthy Indiana Plan, but said she was effective across party lines at incorporating the Pence administration's wishes.

"She's very resourceful and intelligent," says Brown. "But the question now becomes, 'What will be her marching orders as they relate to Medicare and Medicaid?' "

Verma's role in shaping Indiana's health care policy has had some controversy. According to a 2014 report from The Indianapolis Star, she has received millions of dollars from the state through her work with the Indiana government. She was also paid by Hewlett-Packard, a Medicaid vendor that received more than $500 million in state contracts. Government ethics experts told the Star the arrangement presented a conflict of interest.

Verma didn't immediately respond to requests for comment, nor did Gov. Pence's office.

This story is part of a reporting partnership with NPR, Side Effects Public Media and Kaiser Health News.