Architect of Indiana's Medicaid plan faces confirmation hearing
WASHINGTON – Seema Verma, the Indiana health care consultant who has been tapped to head the Centers for Medicare and Medicaid Services, wants to give states more ability to craft their own health care systems for the poor.
“I will work toward ushering in a new era of state flexibility and leadership to drive better outcomes,” Verma planned to tell senators at her confirmation hearing today, according to a copy of her prepared remarks.
Exhibit A is likely to be Indiana’s alternative Medicaid program, which Verma designed, and which has been praised by Health and Human Services Secretary Tom Price as a national model.
“What Indiana’s done is really a best practice, I think, for many other states to follow,” Price said during his confirmation hearings.
Advocates say the Healthy Indiana Plan — known as HIP 2.0 — promotes individual responsibility because participants make monthly contributions into health accounts which help pay for their services.
State officials say HIP 2.0 has transformed recipients into engaged participants and increased healthy behaviors.
But a recent independent evaluation of the program is less rosy. Researchers at the nonpartisan Kaiser Family Foundation found beneficiaries can be deterred and confused by the health accounts. They also said it’s too early to conclude if they’ve led to a more efficient use of health care services and better health outcomes.
As governor, Vice President Mike Pence resisted the Obama administration’s efforts to conduct its own evaluation of the program.
While the new Trump administration wants to make it easier for states to design their own programs, it’s unclear how much money they will have to work with.
Congressional Republicans have not only pledged to dismantle the Affordable Care Act –— the source of the additional money Indiana is tapping for the program covering nearly 400,000 Hoosiers — but they’ve also long pushed to cap the amount of federal money states receive from the jointly funded program.
Previous GOP proposals would have cut as much as 40 percent from Medicaid funding, which accounts for more than half of all federal funds spent by states.
Under the request Indiana recently made to continue HIP 2.0 for another three years, the federal government would pick up all but $1.5 billion of the $10.1 billion three-year tab. That’s the cost for those covered under the Affordable Care Act’s expansion of Medicaid eligibility to people earning up to 138 percent of the federal poverty level.
Indiana and the federal government spend more than $9 billion a year on all Medicaid recipients, with most of the money going to the elderly and people with disabilities.
AARP opposes capping Medicaid spending. The National Governors Association and the United States Conference of Mayors also are against changing Medicaid from an entitlement program, under which anyone who qualifies can receive benefits.
Proponents of limiting Medicaid spending, either by turning the funding into a block grant or setting a per-enrollee cap, argue it’s necessary to rein in the program because it already consumes about 10 percent of the federal budget. While states would get less money, proponents say they’ll make better use of the dollars they get if given more leeway on how to spend it.
Rep. Todd Rokita, R-Brownsburg, calls his bill to turn Medicaid into a block grant the “State Health Flexibility Act.”
“My bill will empower (states) to craft plans that actually help raise people out of poverty instead of trapping them there,” Rokita said in a release last month. “Americans need only look to the Healthy Indiana Plan for an example of how states can innovate and make Medicaid more efficient for those who need it.”
But Indiana is looking to spend more money, not less, on HIP 2.0.
The state is asking for federal permission to include chiropractic services at an additional cost of $2 million a year and to expand access to substance use disorder services for an estimated cost of $70.75 million a year.
“Far too many Hoosiers are caught in the strangling grip of drugs,” Gov. Eric Holcomb said in a release when the state submitted its request to the federal government last month. “I intend to attack Indiana’s drug epidemic with every tool available to state government, and this application reflects my commitment to doing just that.”
Asked if the state supports turning Medicaid into a block grant, a spokesman for the Indiana Family and Social Services Administration said only that the state is monitoring and evaluating federal proposals.
The state law codifying HIP 2.0 says the program must end if federal funding falls below what was included in the ACA.
Verma was expected to say that one of the proudest moments of her career was watching the Indiana legislature pass the Healthy Indiana Plan with a bipartisan vote.
Indiana’s program is modeled after high-deductible plans with health savings accounts that advocates say give consumers an incentive to make smarter health care spending choices. Participants make monthly contributions, based on their income of up to $27 toward a “POWER” account which covers the first $2,500 of their care. Money left in the fund at the end of the year can be rolled over to reduce the required monthly payments. Anyone below the poverty level who can't make the monthly contributions is put into a "basic" plan that has fewer benefits and requires copayments for care.
The state says nearly half the beneficiaries had money left to roll over after the first year of HIP 2.0, and close to one in three said they asked their health care provider about the cost of care.
Those who contributed to their accounts, instead of choosing the basic plan, were more likely to obtain primary care and relied less on emergency rooms for treatment, according to the state’s request to continue the program.
But researchers at the Kaiser Family Foundation found health centers and beneficiary advocates told them the required monthly payments have kept some people from enrolling. And many beneficiaries are confused by the POWER accounts, with some thinking there’s a $2,500 cap on the amount of care they can receive.
Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities, said the state hasn’t shown that the monthly payments are a positive incentive for care. The fact that those in the basic plan are less likely to get primary and preventive care could mean the co-payments they’re charged are a barrier.
“When you look at the way people talk about Healthy Indiana, it’s always on this assumption that paying the premium is leading people to make better choices,” she said. “There’s no proof.”
Contact Maureen Groppe at mgroppe@gannett.com. Follow her on Twitter: @mgroppe.