Trump pick to head Medicare and Medicaid grilled on Obamacare repeal

Seema Verma, president and founder of SVC Inc., gets into an elevator as she arrives at Trump Tower on November 22, 2016 in New York City.

Story highlights

  • "This is a formidable challenge," Verma said
  • She testified before lawmakers Thursday

(CNN)Seema Verma, President Donald Trump's nominee for administrator of the Centers for Medicare and Medicaid Services, took the hot seat Thursday, testifying before lawmakers on the Senate Finance Committee.

As the head of the federal agency that administers Medicare and Medicaid, if confirmed, Verma would find herself smack in the middle of the contentious political debate around overhauling Obamacare.
"This is a formidable challenge but I am no stranger to achieving success under difficult circumstances," Verma said in her opening statement.
    Lawmakers on both sides of the political aisle agreed Verma's role could prove to be one of the most influential in the Trump administration.
    "I suspect you also know that the job you've been nominated for is a thankless one, fraught with numerous challenges," GOP Sen. Orrin Hatch, the chairman of the Finance Committee, said. "The failings of Obamacare are urgent and must be addressed in short order."
    Sen. Ron Wyden, the top Democrat on the panel, said leading CMS was "one of the most consequential positions in government," particularly as his GOP colleagues look to make "radical changes" to the health care system.
    The GOP efforts to dismantle the Affordable Care Act, Wyden warned, "would take the country back to the days when health care was mostly for the healthy and the wealthy."
    Verma would have a full plate as soon as she is confirmed.
    Working alongside Health and Human Services Secretary Tom Price, Verma would lead the agency's overhaul of the regulations governing Obamacare. Hours after Trump took office, he issued an executive order directing agencies to minimize the financial burdens of Obamacare on individuals, states, insurers and others.
    Right off the bat, Hatch asked Verma whether there were any conflicts of interests that lawmakers should be aware of -- a question that appeared to reflect numerous ethics concerns that arose during Price's confirmation process.
    Verma said she would recuse herself from any matter that would present potential conflict. Later in the hearing, she shared that the Office of Government Ethics had advised her against participating in any issues related to mental health services because her husband is a psychiatrist.
    Wyden began his questioning of Verma by arguing that a proposed rule from CMS earlier in the week appeared to contradict Trump's recent promise to provide "insurance for everybody" -- comments that have put Republican lawmakers in an awkward position.
    "What the President said is very different from what CMS did yesterday," Wyden said.
    On Wednesday, CMS issued a proposed rule aimed at placating nervous insurers and starting the shift to a Republican view of health coverage. The changes will give insurers a little more flexibility in designing their plans -- which will likely mean lower premiums but higher deductibles and co-pays for consumers.
    Verma repeatedly noted that she was not involved in development that rule and that she was not in a position to discuss it. "I think the President and I are both committed to coverage," she said.
    It will also be up to Verma's agency to write the rules and administer whatever changes Congress makes to the health reform law.
    Beyond Obamacare, Verma is also in charge of carrying out changes lawmakers to Medicaid and, eventually, Medicare. Congress must decide whether to continue Medicaid expansion, which now covers 11 million low-income adults. But Republicans have even bigger plans for the program -- they want to limit the federal government's financial obligation by turning into a fixed funding grant for states.
    At Thursday's hearing, Verma referred to Medicaid as an important "safety net" that serves the country's most vulnerable citizens. However, she added, it's not working well.
    "We can do better. We have the challenge of making sure that we're providing better care for these individuals but he program isn't working as best as it can," she said.
    But Verma would not endorse any one specific approach to reforming the program. Asked by GOP Sen. Dean Heller whether she would support block granting Medicaid, she demurred, saying she simply support "an approach that improves Medicaid."
    Pressed on whether block grants would be on or off the table, Verma responded that anything that could potentially better the program should be considered, including block grants and per capita caps.
    Overhauling Medicare will prove to be a bigger battle on Capitol Hill. But if House Speaker Paul Ryan is successful in carrying out his plan to give seniors a federal subsidy to help them buy coverage on the private market, it will be up to Verma's team to put it into action.
    On this front, too, Verma was reticent to dive into details. She said would not be her role as CMS administrator to craft legislation.
    "Ultimately, what direction we go into is up to Congress," she said. "I think it's the role of the CMS administrator is to carry out the laws that are carried out by Congress."
    Verma's career has focused on working with states to bring Medicaid in line with Republican ideals, including making recipients more financially responsible for their healthcare.
    She also has deep ties to Vice President Mike Pence's home state of Indiana. Verma worked with Pence's predecessor, Mitch Daniels, to transform the state Medicaid program into the Healthy Indiana Plan. It promoted individual responsibility by asking enrollees to contribute to health savings accounts.
    Verma and Pence then collaborated to accept Obamacare funding to expand Medicaid to all low-income adults.
    Now known as HIP 2.0, the program calls for low-income adults to contribute up to 2% of their income to a savings account, but also gives them enhanced medical benefits, such as dental coverage.
    Those who don't contribute either are put in a basic plan, which offers fewer benefits and requires co-pays for all services, or are dropped from coverage.
    Her efforts provide insight into how she would overhaul Medicaid on a federal level.
    One recent example: Verma, who runs a consulting firm SVC, helped Kentucky seek permission to add a work requirement to its Medicaid expansion program. The application is still pending at CMS.
    At Thursday's hearing, Verma referred to the passage of the Healthy Indiana Plan as one of the "proudest moments' of her career. She stressed, however, that she wasn't advocating that the program would work across the country.
    "Every state is different," she said.