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On first day in office, new Medicaid chief urges states to charge premiums, prod recipients to get jobs

Seema Verma is sworn into office by Vice President Pence on Tuesday as her husband and children look on. Verma now heads the Centers for Medicare and Medicaid Services. (Alex Wong/Getty Images)

Hours after she was sworn in, the Trump administration’s top official for Medicaid and her boss dispatched a letter to the nation’s governors, urging states to alter the insurance program for the nation’s poor by imposing insurance premiums, charging them for part of emergency room bills and prodding them to get jobs.

The letter, sent Tuesday night by Seema Verma, the new administrator of the Centers for Medicare and Medicaid Services (CMS), and Health and Human Services Secretary Tom Price, also derides the Medicaid expansion that 31 states and the District of Columbia adopted under the Affordable Care Act (ACA).

The expansion, which has extendedMedicaid to 11 million people with incomes of up to about $16,000 for a single person or nearly $34,000 for a family of four, “was a clear departure from the core, historical mission of the program,” the letter says.

By paying so much for covering these new beneficiaries, they contend, the ACA has “provided states with an incentive to deprioritize the most vulnerable populations.” The three-page letter does not mention that, for the first three years, the federal government paid the entire cost of covering the expansion group and still pays nearly all of that.

The message from Verma and Price signals an initial step toward redesigning the program along lines that conservatives have long favored and that the new Medicaid administrator brought to Indiana as a consultant and the chief architect of broad changes that state first adopted nearly a decade ago.

Trump turns to conservative tacticians to run HHS and Medicare, Medicaid

Both officials have in the past railed against a system that requires states to get federal permission to “modernize” their Medicaid programs. But the letter makes clear that they will, at least for now, continue to rely on a system in which states must request “waivers” to become exempt from federal rules so they can try different approaches within the program.

Medicaid covers 68 million low-income people, including children, pregnant women and those who are elderly or disabled as well as adults who merely are poor or qualify through the ACA’s expansion.

The quick impetus for states to rethink their approach comes as House Republicans debate plans that would rewrite the program in fundamental ways, ending the federal government’s open-ended responsibility in paying for beneficiaries’ costs while abolishing the ACA’s expansion within several years.

A particular concern among critics of such conservative directions is the possibility that Medicaid might require people to be employed or training for jobs to qualify for benefits — as the nation’s main welfare program has done for the past two decades. In approving a variety of Medicaid experiments under the ACA, the Obama administration consistently rejected requests from any state that wanted to compel its Medicaid beneficiaries to hold a job.

Andy Slavitt, the acting administrator of CMS until January, said the new HHS and CMS leaders “are going to do what they are going to do.” These would shift the program in ways the Obama administration would not have done, he acknowledged. Still, he praised their intention to continue requiring waivers to test Medicaid experiments.

The letter from Verma and Price stops short of urging an outright work requirement, saying that CMS will “review and approve meritorious innovations that build on the human dignity that comes with training, employment and independence.”

Asked whether the Trump administration would allow states to impose work requirements within Medicaid, an HHS spokesman replied, “We can’t speculate.”

Tom Price belongs to a doctors group with un­or­tho­dox views on government and health

Verma was sworn in on Tuesday, a day after the Senate confirmed her nomination by a vote of 55 to 43 along party lines. The vote reflected the deep divisions on Capitol Hill over the Trump administration’s plans for the nation’s health-care system. At her confirmation hearing earlier this month, Verma sidestepped the question of whether she would favor a nationwide extension of the unusual Medicaid provisions she helped Indiana secure.

Indiana requires everyone who receives benefits to pay monthly premiums, and their contributions are invested in health savings accounts. Very poor people who do not make the payments are bumped down to a lower tier of coverage, while people with slightly more income are temporarily removed from the program.

CMS is a powerhouse within the Department of Health and Human Services, overseeing about $1 trillion in spending on the two vast entitlement programs. For the past seven years, the agency also has carried out most of the implementation of the ACA, which Trump and others in the GOP are working to demolish and replace with more conservative health policies.