Republicans in Congress pledge to use the first opportunity of the Donald Trump presidency to repeal ObamaCare. Trump has met that pledge by appointing people most likely to dismantle it from the inside. First Trump appointed staunch ObamaCare opponent Rep. Tom Price to head HHS, and now he’s picked a health-industry expert to run the agency responsible for its Medicaid expansion. Seema Verma has plenty of experience in working the margins of ObamaCare’s Medicaid expansion to push back against it:
President-elect Donald Trump on Tuesday morning picked the founder and CEO of a health policy consulting firm, Seema Verma, to serve as Administrator of the Centers for Medicare and Medicaid Services.
“I am pleased to nominate Seema Verma to serve as Administrator of the Centers for Medicare and Medicaid Services,” said President-elect Trump in a statement. “She has decades of experience advising on Medicare and Medicaid policy and helping states navigate our complicated systems. Together, Chairman Price and Seema Verma are the dream team that will transform our healthcare system for the benefit of all Americans.”
Verma has worked with VP-elect Mike Pence to produce a compromise on Medicaid expansion in Indiana, and then did the same in Kentucky and other states run by Republican governors. Verma helped them avoid some of the pitfalls of the expansion when they came under heavy political pressure to join the expansion. Thanks to her work, some governors were able to salvage HSAs and work requirements as part of their packages — although conservatives still howled when these states joined the expansion.
This pick addresses one of the stickier questions for Republicans after repeal: what next? Democrats have already begun to focus their attacks on repeal by accusing the GOP and Trump of leaving low-income Americans out in the cold by rolling back the Medicaid expansion as part of the repeal. Verma has worked on this issue for years, and should be able to work out a transition plan quickly to reduce the impact of repeal on these recipients, and therefore the political liabilities of ObamaCare repeal.
Beyond ObamaCare’s Medicaid expansion, the Verma appointment seems to signal a willingness to entertain broader reform, too. In August of this year, not long after Pence joined the ticket, Verma co-wrote this essay detailing the need for reform on a consumer-oriented basis. She uses the successes of Healthy Indiana 2.0 (HIP) as a platform for greater reform:
HIP’s consumer-driven design familiarizes its members with the concepts of commercial health insurance and encourages them to be prudent consumers, comparing cost and quality of health care services. In light of the “churn” present in the Medicaid program, HIP’s policies are structured to be as consistent as possible with standard provisions found in commercial health plans, including Marketplace plans. This consistency is also important to mitigate the subsidy “cliff,” which effectively increases the marginal tax on work. Taken together, HIP’s series of incentives and consequences engage members in their health care decisions, encourage continuous enrollment, and support transition to commercial health insurance. …
HIP 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, providers, and overall personal health. Because HIP Plus members’ own dollars are at stake, they have “skin in the game” and therefore an incentive to make cost-conscious health care decisions. Members receive monthly statements detailing the cost of services received, which they can be mindful of when seeking out lower-cost alternatives. Forty percent of HIP Plus members check the balance of their POWER account at least once per month, and one in four members ask their providers about the cost of care.
HIP Plus members who fail to make contributions within a 60-day grace period are terminated from the plan. Terminated HIP Plus members below the poverty line are transferred to the HIP Basic plan, which offers a more limited benefit package that excludes dental and vision coverage. HIP Basic members also are subject to co-payments for services, which can easily wind up being costlier than the contribution amounts required to maintain HIP Plus enrollment. Because HIP Plus represents the superior value proposition, members have a strong incentive to avoid falling back into HIP Basic. Terminated HIP Plus members above the poverty line must wait six months to re-enroll, with a few limited exceptions. This consequence is consistent with the Marketplace’s non-payment policy, where terminated policyholders must wait up to nine months for the next open enrollment period in order to regain coverage.
According to Verma, this results in better health outcomes and not just cost savings:
Metrics in several areas are significantly better among contributing members. HIP Plus members happen to be sicker than their HIP Basic counterparts, yet they have higher rates of primary (31 percent to 16 percent) and preventive care (64 percent to 45 percent), lower emergency room usage (775 to 1,034 visits per 1,000 member years), greater drug adherence (84 percent to 67 percent), and fewer missed appointments (18 percent to 23 percent). Perhaps most telling, HIP Plus members are more satisfied with their coverage than those who have defaulted to HIP Basic (84 percent to 71 percent).
HIP is a first cousin to Paul Ryan’s premium-support plan for Medicare. It’s closer to Medicare Advantage, only without the insurer partnership; it’s still a single-payer plan in the end, which HIP makes more efficient by placing pricing incentives back into the mix. In that sense it doesn’t change the underlying structure of direct government support, but instead uses those pricing signals to encourage better behavior.
That becomes an interesting wrinkle in the entitlement-reform issue. No one expects Trump to go along with Ryan’s plan, having explicitly argued against structural change in Medicare during the campaign in favor of a focus on “waste, fraud, and abuse.” This might portend a smaller-scale effort to tamp down the rate of cost increases for the short term while Ryan builds the support necessary for a restructuring of Medicare further down the line.
Expect Democrats to fight both the Price and Verma picks tooth and nail. They can’t actually prevent either one from confirmation as long as Senate Republicans remain united in support, thanks to Harry Reid’s nuking of the filibuster on presidential appointments except to the Supreme Court. They can make a big enough stink to get press coverage and frighten voters into thinking Trump et al are trying to take away their benefits, and they’ll probably have allies in the national media in spreading that hysteria.