Trump’s CMS pick is viewed as both patient advocate and foe

By Virgil Dickson
Modern Healthcare, November 29, 2016

President-elect Donald Trump Tuesday announced that Seema Verma, the president, CEO and founder of SVC, a national health policy consulting company that has helped craft Medicaid expansion plans in Indiana, Iowa, Kentucky, Michigan and Ohio, would work under Rep. Tom Price, who currently is a congressman from Georgia but has been nominated for HHS secretary.

Patient advocacy and policy experts agree that Verma’s philosophy encourages people to take charge of their healthcare. Verma has supported charging premiums to individuals above and below the poverty line and freezing beneficiaries out of coverage if they don’t pay. She is also in favor of mandating enrollees search for work while being covered and that they are timely when reapplying for Medicaid coverage or else face a lockout period that could last a year.

Even small contributions can cause some low-income people to choose to bypass coverage, according to Judy Solomon, a vice president for health policy at the left-leaning Center on Budget and Policy Priorities.

For example, a recent state evaluation of Indiana’s HIP 2.0 waiver, which Verma helped develop, found that about one-third of those eligible don’t enroll because they can’t or don’t want to pay a premium, Solomon said.


Trump’s Pick To Run Medicare And Medicaid Has Red State Policy Chops

By Jake Harper
Kaiser Health News, November 29, 2016

On Tuesday, President-elect Donald Trump tapped Seema Verma, a health care consultant, to head the Centers for Medicare and Medicaid Services.

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 or HIP 2.0, went into effect early last year.

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 special permission from CMS to implement them through a waiver.

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.


Indiana: Health Care Reform Amidst Colliding Values

By Mitchell Roob and Seema Verma
Health Affairs Blog, May 1, 2008

In May 2007, Indiana enacted comprehensive health reform in the form of the Indiana Check-Up Plan and its centerpiece, the Healthy Indiana Plan (HIP).

HIP is the first Medicaid expansion in the nation to be modeled in the spirit of a high deductible health plan (HDHP)/ health savings account (HSA).

The many conservatives of our state initially balked at the idea of either establishing another entitlement program that could create budget shortfalls for future generations or creating another Medicaid plan that creates a platform for unhealthy lifestyles that leads to abuse of the healthcare system. We managed to overcome these obstacles and our experience provides several lessons for reformers elsewhere:

1) Inaction is not a market solution.

2) Choose reforms that help those who need it, but also increase personal responsibility and utilize market incentives.

Hailed by conservatives, HDHPs and HSAs promote the notion of consumerism and promise greater price transparency, competition and quality. By giving participants some “skin in the game,” they encourage healthy lifestyles and provide individuals a financial incentive to make cost- and value-conscious healthcare decisions, which in turn increases pressure on providers to demonstrate value and quality.

Following the HSA model, the Personal Wellness and Responsibility (POWER) Account is used to fund the deductible. Moving away from premiums and copays that are typically too low to incentivize collection by providers, HIP requires individuals to make mandatory monthly contributions – ranging from 2 percent to 5 percent of income, up to $92/month — to their POWER Account. To prevent participants from obtaining temporary coverage, penalties are stiff for payment lapses.

3) Be fiscally responsible.

The legislation restricts the State from providing services “beyond the level of state appropriations authorized for the plan.”

The implications of a non-entitlement program were enormous, as it gave many legislators the peace of mind to allow them to support the bill.

4) Reach out across party lines and to multiple constituencies.

5) Compromise and cut deals

In developing HIP, we never let the perfect be the impediment of the good.

6) With the exception of compromise, don’t take any of the above lessons too seriously.

Federal policy, and in particular CMS’ waiver process, should provide maximum leeway for this sort of state experimentation.

Through each round of review and approval the plan was tweaked, but with each turn, the health savings account model remained intact.

May 1, 2008

Don McCanne:

Health savings accounts (HSAs) are specifically designed to use regressive tax policies to fund health care for higher-income individuals. They also reward individuals for being fortunate enough to remain healthy by allowing them to use those funds for other purposes in retirement, with the same tax benefits as an IRA.

Since HSAs are designed to benefit the healthy and wealthy, they are not the solutions that we need to address the very severe deficiencies in our health system. They are an especially lousy model to finance health care for lower-income individuals with greater health care needs.

The description of the POWER accounts as “following the HSA model” is particularly disingenuous. Although participants are required to deposit their own funds into the POWER accounts (on a sliding scale), they receive no tax advantage (though most of them wouldn’t anyway because of their low incomes). Unlike an IRA, they receive no income from the funds deposited in these accounts. When they leave the program, they may receive a pro-rated amount of their own contribution, but none of the state’s contribution. Since the account limit is $1100, it is likely that the individual’s pro-rated amount would be a relatively paltry sum given as a reward for remaining healthy, but would totally disappear quite rapidly as the $1100 is used for health care.

This blog is read by members of the health policy community who understand health policy science. The authors impair their own credibility amongst these professionals when they use the “skin in the game” rhetoric of right-wing ideologues. Pretending that small, segregated accounts somehow constitutes a major policy breakthrough is an unproductive diversion from the dialogue on reform that we desperately need.

For a critique of a more recent Health Affairs Blog on POWER accounts co-authored by Seema Verma:’s-phony-medicaid-health-savings-accounts

In media reports about her selection as CMS administrator, Seema Verma is being praised for her policy acumen and for being able to work across the isle, that is, as long as “the health savings account model (for Medicaid) remained intact.”

My comment on the POWER accounts (above), in response to the 2008 Health Affairs Blog that she co-authored, demonstrates that she lacks policy acumen. And the insistence that low-income Medicaid beneficiaries, even below the poverty level, must have “skin in the game” by contributing their own funds to their care is a concept that can be considered bipartisan when one or two neoliberal Democrats (or maybe more) join the Republicans in advancing this cruel health policy, even though it’s clearly a conservative concept.

It was not only in the 2008 article that the reference to “skin in the game” appeared, it was also repeated in the 2016 blog (link above): “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.”

Little does it matter that this ideological nonsense caused “one-third of those eligible (to not) enroll because they can’t or don’t want to pay a premium.” It is far more important to her to advance her ideology than it is to meet the health care needs of the targeted population. And, yes, those who fail to pay are punished by being denied certain benefits in the future – the nature of the punishment being dependent on variations in eligibility. Nice!

These articles were written eight years apart, and the second article, written after the negative impact was obvious, demonstrates that her soft manner and demeanor did not warm up her cold, cold heart.

The Kaiser Health News article reports that she “received millions of dollars from the state through her work with the Indiana government” while “also paid by Hewlett-Packard, a Medicaid vendor that received more than $500 million in state contracts.” Her cold heart allows her to feign obliviousness to this blatant conflict of interest.

And we are going to put her in charge of the Centers for Medicare and Medicaid Services, with its trillion dollar budget?!