USA First Look

Senate confirms Seema Verma to head Medicaid, Medicare

Businesswoman Seema Verma has said that Medicaid, the health care program for 74 million low-income Americans, fosters dependency among the poor.

Seema Verma, left, then President-elect Donald Trump's nominee for administrator of the Centers for Medicare and Medicaid Services, gets on an elevator in the lobby of Trump Tower in New York in January.
Evan Vucci/File/AP
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The Senate has confirmed President Trump's pick to head the Centers for Medicare and Medicaid Services, Seema Verma.

Ms. Verma, who worked with then-Indiana Gov. Mike Pence to design a Medicaid expansion there, was confirmed by a 55-43 vote, mostly along party lines. Part of the Department of Health and Human Services, the $1 trillion agency she will head oversees health insurance programs for more than 130 million people.

Verma will have her work cut out for her as Republicans push forward with their plans to repeal and replace the Affordable Care Act, commonly known as Obamacare. As head of the Centers for Medicare and Medicaid Services, Verma will play a major role in implementing the Republican's proposed replacement, the American Health Care Act.

Verma, a first-generation American whose parents immigrated from India, is the owner and founder of SVC Inc., a healthcare consulting firm that has helped redesign Medicaid in several states. In her position as president of SVC, Verma has been highly critical of Medicaid, saying that she wants the government to improve health rather than simply focusing on paying bills.

"The status quo is not acceptable," said Verma, referring to the program.

At her hearing, Verma faced scrutiny from Senate members for her Medicaid redesign in Indiana, which uses financial rewards and penalties to encourage patients away from emergency rooms and towards primary-care providers. Critics have said that the plan, as modified by SVC, is confusing and has led many people to accidentally incur unnecessary penalties. But Verma defended the reward/penalty program during her Senate hearing, saying that low-income people are perfectly capable of making health care decisions based on the rational incentives created by her team.

In an initial committee hearing, Sen. Ron Wyden (D) of Oregon said Verma's firm was being paid by companies providing services to Indiana's health program even while she was working to redesign the Medicaid in that state. Verma denied the allegation, and promised to divest her financial interests in the firm within 90 days of her confirmation.

The American Health Care Act, which will be one of Verma’s top concerns as head of Medicare and Medicaid, has come under fire from many Democrats and even some Republicans in Congress. According to a study released on Monday by the nonpartisan Congressional Budget Office, the CBO found the new healthcare plan would cause 14 million Americans to lose health insurance within a year, and 24 million more would be uninsured by 2026.

Secretary of Health and Human Services Tom Price told reporters on Monday that the Trump administration strongly disagreed with these findings, saying that the CBO had not examined the new policy thoroughly enough.

Verma will report to Mr. Price in her new position, but her views on Medicare and Medicaid slightly differ for her new boss's. In the past, Price has embraced turning government-guaranteed Medicare into a voucher plan with a fixed government contribution for each beneficiary. Supporters of the plan say the strategy would increase competition and drive down premiums, but critics say the plan would leave some seniors with higher premiums as others turn to private insurance.

While the picks of Price and Verma fill two key positions in the Health and Human Services department, many senior officials in HHS have yet to be confirmed or appointed.

This article contains material from the Associated Press and Reuters.