Seema Verma, nominated to lead the Centers for Medicare and Medicaid Services, testifies at her confirmation hearing Thursday before the Senate Finance Committee. (Pete Marovich/Bloomberg News)
As congressional Republicans move from talking points to details of how to abolish the Affordable Care Act, behind-the-scenes jockeying over the future of Medicaid demonstrates the delicate trade-offs the GOP faces in trying to steer health policy in a more conservative direction.
For years, many Republicans have railed against the ACA’s expansion of Medicaid, which has extended coverage to about 11 million people. But now that they have the political power to reverse those gains, internal disagreements have emerged.
Some lawmakers want to preserve the federal money their states are getting under the expansion. Others argue that part of that money should be shifted to states that did not broaden their programs — or used for other purposes.
Drew Altman, president and chief executive of the Henry J. Kaiser Family Foundation, said Republicans are “between a rock and a hard place, unless they want to spend more money to preserve the expansion and pay off the non-expansion Republican states who feel like they have toed the party line.”
Some of that intraparty debate spilled into public view Thursday at a Senate confirmation hearing for health-care consultant Seema Verma to lead the Centers for Medicare and Medicaid Services, an agency that oversees $1 trillion in federal spending within the Department of Health and Human Services.
Two GOP senators whose states have expanded Medicaid coverage pressed Verma for her views. She often deflected their questions.
The divide over Medicaid’s future is a legacy of a 2012 Supreme Court decision giving states the choice of whether to embrace the ACA provision that for the first three years has paid the entire cost of covering Medicaid-expansion beneficiaries — adults earning up to 138 percent of the federal poverty level, or about $16,000 a year.
Thirty-one states and the District of Columbia decided to do so, and the law steered roughly $79 billion in new federal funds to them in just the first 18 months, according to a Kaiser Family Foundation analysis.
Republican governors lead 16 of those states, and they and their members of Congress are eager to prevent any repeal of the health-care law from taking away their extra money.
Other Republicans, however, contend the expansion funding instead is needed to refashion the nation’s health-care system along more conservative lines — or simply to reduce overall federal spending. And still others contend that any ACA replacement should steer some expansion money to their non-expansion states.
Such conflicting views reflect how “the choices [states] made don’t fit neatly into red and blue boxes,” said Vikki Wachino, who was Medicaid director for the final two years of the Obama administration. “You have states of all stripes that have taken up expansion. . . . Then you have members of Congress who are looking beyond the rhetoric and trying to . . . do right for their states or their districts.”
During a closed-door session on health care at a House GOP retreat last month, Judiciary Committee Chairman Bob Goodlatte (R-Va.) told his colleagues they had to acknowledge that the “elephant in the room” was entitlement spending.
Speaking to reporters on Thursday, House Speaker Paul D. Ryan (R-Wis.) acknowledged that he and his colleagues need to perform a balancing act. Republicans, he said, will work to ensure that “as we advance the principle of federalism by giving states more control over Medicaid so they can have innovative reforms, that we do it in a way that doesn’t disadvantage either of the two sides of that coin.”
Ryan did not say how he would seek to accomplish that. But a policy brief distributed to the GOP caucus on Thursday hints at the differing schools of thought.
It says expansion states could continue getting their extra federal Medicaid money for “a limited period of time” — to “ensure we are not pulling the rug out from underneath States or patients.” After that period, the brief says, the federal government would no longer reimburse those states at the higher ACA level but at the same level of costs for standard Medicaid beneficiaries. That formula hinges on individual states’ wealth.
Beyond that transition, the brief makes clear, the ideas under consideration would move Medicaid away from its half-century as an entitlement program for anyone who is eligible. Instead, it would give states a fixed sum — or “allotment” — for every person enrolled, with the amount tied to a state’s previous Medicaid spending, the proportion of its cost covered previously by the federal government and an annual inflation adjustment.
Or states could switch to a Medicaid block grant — a more far-reaching change that would give them a lump sum and more freedom over how to use the money. Critics argue that would make the program less responsive to major economic swings and could lock in disparities among states.
The anxieties of some GOP lawmakers from states that expanded Medicaid under the ACA were on public display during Verma’s confirmation hearing before the Senate Finance Committee. She sidestepped a wide array of questions on her views, often saying either that decisions resided with Congress or that she was unfamiliar with certain proposals.
Sen. Dean Heller (R-Nev.), noting that expansion has swollen the Medicaid rolls in his state from 350,000 to more than 600,000, asked point blank whether Verma supported block grants.
At first, Verma answered generally, saying, “For me, the opportunity is to improve health outcomes.” Prodded again, she said, “What we have today doesn’t work well.” Asked yet again whether block grants were “on the table” as a way to improve the program, Verma finally responded: “Anything should be on the table that can improve health outcomes for this very vulnerable population. Block grants, per capita cap. Anything we can do to improve health outcomes.”
Verma also said that states should be freer to redesign their Medicaid programs without needing the federal permission, in the form of “waivers,” that the program has always required.