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Medicaid needs to change, head of program says in Boston, and that includes spending caps

The administrator of Medicare and Medicaid Services, Seema Verma, during a recent visit to Nashville.Jonathan Mattise/Associated Press

Seema Verma has one of the biggest jobs in health care: She runs the massive federal agency that insures 130 million Americans on Medicare, the health program for seniors, and Medicaid, the health program for the poor, low-income, and disabled.

As administrator of the Washington-based Centers for Medicare & Medicaid Services, Verma has considerable sway over the broader health care industry. Care providers and private insurers pay close attention to what Medicare and Medicaid are doing.

Verma, who was picked by President Trump, also espouses certain conservative views that are unpopular in liberal-leaning Massachusetts. She advocates for capping Medicaid spending, and she blames the Affordable Care Act, or Obamacare, for driving up costs and limiting choice for consumers.


Verma visited Boston Wednesday to speak to doctors, scientists, investors, and executives at the World Medical Innovation Forum, run by Partners HealthCare. She later sat down with the Globe. Here are some takeaways from her remarks during that conversation:

The Medicaid program has grown, and it needs to change

Medicaid insures about 72 million Americans. Enrollment has swelled over the past several years, in part because the Affordable Care Act expanded eligibility rules to allow more adults into the program.

“Is this the most appropriate coverage [for them]?” Verma asked.

“If we’re going to continue down this path, the Medicaid program needs to be modified significantly so it can accommodate the expansion [of the] population.”

Verma expressed support for an idea that’s backed by many conservatives: implementing limits on Medicaid spending. Spending limits could be imposed on a per-patient basis, or per state. State spending caps are known as block grants.

“There’s a lot of promise in those kinds of programs,” she said.

Such spending limits are strongly opposed by Democrats and some Republicans, including Massachusetts Governor Charlie Baker.

States need flexibility to run their Medicaid programs

Medicaid is jointly run and funded by the federal and state governments. Verma stressed that states should have more leeway in operating their Medicaid programs. Her agency is encouraging the states to test new initiatives — such as requiring able-bodied Medicaid patients to work in order to receive health benefits.


“The decision-making should really be at that local level,” Verma said. “They’re on the front lines, they’re much better suited, much better positioned to figure out what works best.”

But she declined to talk specifically about Medicaid in Massachusetts, which covers 1.85 million people and costs about $16 billion a year. (About half of that cost is shared by the federal government.)

The Baker administration is restructuring Massachusetts’ Medicaid program, which is known as MassHealth, to be a system of “accountable care,” in which the state pays doctors and hospitals based on the quality of the care they provide and on the outcomes for patients.

Separately, the Baker administration has asked federal officials for permission to limit some of the prescription drugs that are covered by MassHealth, in order to save money.

Patients should be more engaged in their health care

Verma talks a lot about engaging and empowering patients. She wants to inject more consumerism into the Medicare and Medicaid programs.

Before taking her current job, Verma was a health care consultant who worked with state Medicaid programs. She designed a “consumer-directed” Medicaid program for Indiana, which included requiring members to pay premiums as they would for private health plans.

Verma said patients need more data about health care costs and quality so they can make better decisions.


This week, her agency proposed a rule that would require hospitals to publicly post information about their charges.

Officials in Massachusetts also have promoted transparency about health care costs, and the Baker administration is preparing to launch a health costs website for consumers.

“We need to understand that before going to the emergency room for routine care, that that’s not only costing the health care system more, but it’s actually diverting attention for those people that really need care,” Verma said.

“That’s not something that should just be the government’s problem; it should be something that we’re all collectively engaged with.”

Priyanka Dayal McCluskey
can be reached at Follow her on Twitter @priyanka_dayal.