Trump nominee has decried Medicaid for fostering dependency

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Posted: Feb 16, 2017 7:16 AM
Trump nominee has decried Medicaid for fostering dependency

CHICAGO (AP) — The businesswoman President Donald Trump selected to oversee Medicaid, the health care program for 74 million low-income Americans, has said the program is structurally flawed by policies that burden states and foster dependency among the poor.

Seema Verma heads Indianapolis-based SVC Inc., a consulting firm that works with GOP-led states seeking federal leeway in how they spend Medicaid dollars. Her proposed solutions can be seen most dramatically in Indiana, where Medicaid enrollees pay fees and a missed payment means a six-month lockout from the program. A still-pending proposal she developed for Kentucky includes work requirements for most adults.

Elsewhere, the poorest Medicaid recipients usually don't pay monthly fees, although many states have experimented with fees for certain groups such as working adults with disabilities.

Democrats in Washington are concerned Verma's methods may become a favored model as Republicans work to repeal the Affordable Care Act, making it harder for non-disabled adults to get access to health care. Underway for two years, the short track record of Indiana's Medicaid expansion leaves questions about whether Verma's ideas have helped poorer Americans or hurt them.

Indiana and Iowa, which also has a Verma-designed program with monthly fees, expanded coverage while saving taxpayers' money, said Marcus Barlow, a spokesman for SVC. He extolled the results of Verma's programs, pointing to data showing the two states spent less per capita on newly eligible Medicaid enrollees than the national average while keeping uninsured rates below average.

"We're proud of the innovative solutions based specifically on each state's needs," Barlow said.

Verma, who faces a Senate Finance Committee hearing Thursday, has been highly critical of Medicaid.

"At Medicaid's core is a flawed structure," Verma said in 2013 testimony to a congressional subcommittee. States must endure a "cumbersome" and "capricious" procedure to get approval for innovative ideas, she said, and "rigid, complex rules" have created "an intractable program that does not foster efficiency, quality or personal responsibility."

Federal Medicaid policies limiting copays and premiums, Verma said, "disempower individuals from taking responsibility for their health, allow utilization of services without regard for the public cost and foster dependency."

In Indiana, Verma worked with then-Gov. Mike Pence, now Trump's vice president, to win federal permission to expand Medicaid, gaining federal dollars under President Barack Obama's Affordable Care Act while making the program look more like commercial insurance. Financial carrots and sticks are meant to discourage low-income families from overspending on health care.

"The only way Gov. Pence was going to pass coverage expansion was through this means," said Doug Leonard, president of the Indiana Hospital Association. Hospital fees and a cigarette tax pay the state's portion of the expansion.

The program, known as the Healthy Indiana Plan 2.0, requires people to pay $1 to $100 a month, depending on income, for beefed-up coverage that includes dental and vision care.

A missed payment means losing coverage and a six-month lockout before reapplying. More than 2,600 individuals were locked out in this way during the program's first year.

Carol Irvin of Mathematica Policy Research, who led Indiana's evaluation of the program's first incarnation from 2009 through 2014, said its financial incentives are misunderstood by those who are supposed to be motivated by them.

"They didn't necessarily understand the connection and, we would argue, they didn't understand the incentives," Irvin said. A separate evaluation of HIP 2.0's first year showed similar findings.

Blacks and Hispanics are underrepresented, and it has been difficult for evaluators to survey non-enrollees to find out why some people haven't signed up, Irvin said.

Many Indiana residents were able to get coverage because of the expansion, although not as many as the state had hoped. Seventy-three percent of the 559,000 projected to be eligible actually enrolled in HIP 2.0 for at least a month during its first year.

People below the poverty line don't lose their coverage entirely if they miss a payment, but instead are bounced down to a "HIP Basic" plan that requires copays and doesn't include dental or vision.

That's what happened to 54-year-old fast food cook Michael Boone of Gary, Indiana. He missed a few $12-a-month payments and was moved from "HIP Plus" — under which he'd been able to see a dentist for "the first time in my adult life" — to the basic plan. Still, he said he appreciates the coverage and will be back on the "HIP Plus" plan soon.

"It's been a godsend," said Boone, who says he can afford $12 a month. "I never had health care before."

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Follow AP Medical Writer Carla K. Johnson on Twitter at https://twitter.com/CarlaKJohnson .