Summary
President-elect Donald Trump has tapped Rep. Tom Price (R-GA) to lead the Department of Health and Human Services (HHS), Trump’s transition team announced early this morning. Rep. Price, an orthopedic surgeon, has been a longtime opponent of the Affordable Care Act (ACA), was one of the first Republicans to introduce an alternative to the law when Democrats were debating healthcare reform in 2009 and 2010. The current Chairman of the House Budget Committee, many expect that Price will be a key player in helping the House pass an ACA replacement plan. Price also shares a close relationship with Vice President-elect Mike Pence – both former chairmen of the House’s Republican Study Committee.
Additionally, Trump announced this morning that he will nominate Indiana-based healthcare consultant Seema Verma as the next administrator of CMS. Verma may be best known for her work on Medicaid issues and her close ties to Mike Pence. She designed Pence’s Medicaid expansion model – known as Healthy Indiana Plan 2.0 – and has advised several Republican states on how to add conservative elements to their programs, such as health savings accounts and employment requirements.
Both picks indicate Pence’s strong influence in leading Trump’s transition efforts. Moreover, the selections would install a pair of conservative and “wonkish” policy thinkers at the helm of the administration’s most significant healthcare agencies.
Price’s Healthcare Background
The healthcare plan introduced by Price has similarities to both the “Better Way” plan put forward this year by House Speaker Paul Ryan (R-WI) and the plan Trump outlined during his campaign. Price’s bill – which also includes traditional GOP ideas such as health savings accounts, high-risk insurance pools, and allowing interstate insurance sales – also happens to be the most detailed, and is the only one that has been put into legislative language.
Price’s proposal arguably does less to protect the sick than Ryan’s ‘Better Way’ plan does. It includes limited funding for the high-risk pools: $3 billion, compared with Better Way’s $25 billion. Its limit on the employer-sponsored tax exclusion is also significantly lower than other GOP-backed proposals ($8,000 for an individual). Both of these differences would make Price’s bill less expensive for the government, and might be alluring to legislators as they begin the budgetary scoring process.
As HHS Secretary, Price would have opportunities to undermine the ACA through the regulatory process, such as loosening restrictions for the states on Medicaid or not enforcing the individual mandate. Price and his team would have to decide how aggressively to peel back the health law through the regulatory process while Congress works on repeal legislation (more on what actions HHS could take to undermine the law is attached). Price has also been a leading voice on health IT issues in Congress, fighting for a more provider-friendly version of the meaningful use EHR incentive program. Last year, he helped collect 116 House signatures supporting a slowdown in the process.
Price has indicated that he plans to accept the nomination, saying in a statement that “it is an honor to be nominated to serve our nation as Secretary of Health and Human Services. Thanks to President-elect Trump and Vice President-elect Pence for their confidence.” Leading Democrats, meanwhile, have indicated that Price could face a nomination fight in the Senate next year. “Congressman Price has proven to be far out of the mainstream of what Americans want when it comes to Medicare, the Affordable Care Act, and Planned Parenthood,” incoming Senate Minority Leader Chuck Schumer (D-NY) said in a statement. “Nominating Congressman Price to be the HHS secretary is akin to asking the fox to guard the hen house.”
Verma’s Healthcare Background
Through her consulting firm SVC Inc., Verma has worked on several high-profile Medicaid expansion proposals for Republican governors – beyond her work on Healthy Indiana Plan 2.0. That includes Kentucky, where Republican Gov. Matt Bevin has threatened to pull the plug unless the Obama Administration approves his pending request. Bevin’s plan includes a work requirement as a condition of receiving benefits and lockout periods for failure to pay, and is modeled off of Indiana’s Medicaid expansion model. Prior to consulting, Verma worked for the Health and Hospital Corporation of Marion County, Indiana and the Association of State and Territorial Health Officials in Washington, D.C.
Verma’s close ties to Republican governors who have backed conservative versions of Medicaid expansion could be a boon to some stakeholders who have expressed concern that the Trump Administration might walk back the ACA’s enhanced federal matching rate for Medicaid expansion. So far, 31 states and the District of Columbia have expanded the Medicaid program, and many Republican governors have expressed a desire to keep the enhanced federal contribution even as other parts of the ACA are repealed. Verma’s selection could signal a interest from the Trump Administration in offering more flexibility for states to pursue “private option” models, impose work requirements, and add other conservative elements to the program.