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Q&A With Seema Verma

As the administrator for the Centers for Medicare and Medicaid Services, Carmel’s Seema Verma is responsible for the healthcare of more than 100 million Americans. We talked with her about the future of those programs, Obamacare, and Medicare for All.

You got your start as an administrator at Wishard Hospital, then became vice president of planning at the Health & Hospital Corporation of Marion County. Why go into such a wonky line of work?
My experience at Wishard really gave me insight into some of the problems in the healthcare system. From my perspective, my job now is all about public service. It’s about trying to strengthen our country. This is such a large sector of our economy, and it really threatens the nation’s future if we can’t figure out how to deliver high-quality care at a lower cost. This is my way of giving back to a country that has certainly been good to me and my family.

What’s the future of Medicare and Medicaid?
Just to give you some perspective on these programs, we’re adding about 10,000 people every day to Medicare. It’s a diverse population, but most of them have a lot of complex chronic diseases, which are very high-cost illnesses, so it’s an expensive group. The Medicaid population also includes many aged, blind, disabled, or pregnant individuals. When Medicare was signed into law 54 years ago, there were only about 19 million beneficiaries. Today, we’re at almost 61 million. Medicaid and Medicare together were about 2.3 percent of federal spending back then, and now they’re almost 24 percent. So it shows you how much the programs have grown.

Both of these programs serve our most vulnerable citizens. They’re lifesaving, and people really depend on them. Last weekend, I met a family from Carmel, and they have a son who has cerebral palsy. At 17 years old, he has the intellectual capacity of a typical 3-year-old and requires around-the-clock care. You can imagine the impact our programs have for that family in terms of how they take care of their son.

So the challenge is: How do we sustain these programs? How do we continue to provide high-quality accessible care while also making sure these programs survive over the long-term? Our perspective is: Let’s address the cost drivers in the entire healthcare system. Because that’s really where the root of the problem is.

The Trump administration has spent a lot of time talking about the need to lower drug prices. Is that one of the primary ways you hope to address healthcare costs?
Yes, that’s one of the fastest-growing areas of spending. We keep hearing about these new high-cost, innovative therapies—which are wonderful, they’re saving lives, extending lives. But with price tags of $1 million to $2 million, we have to figure out how we pay for those things. That’s why the president has been so committed to lowering drug prices. He put out the blueprint in 2018, outlining a comprehensive strategy to lower drug costs. CMS has been very focused on implementing that strategy.

Many of the Democratic presidential contenders are saying Medicare for All could solve a lot of the system’s problems. Do you think that’s a good idea?
I think Medicare is fragile as it is. The program’s trustees have indicated that we’re going to run out of money for this in six years. Medicare spending is expected to grow at 7.9 percent as compared to GDP, which is about 4.5 percent. There was a study by the Urban Institute that said, “The average worker turning 65 will receive $229,000 in lifetime Medicare benefits after they’ve put in roughly $81,000.” You can see that the spending is imbalanced.

When people talk about Medicare for All, I get very concerned about the impact that it would have on our nation’s seniors. They have paid into this program their entire lives. This is something that was a promise that we need to deliver on. You start putting everybody into the program, then you exacerbate those funding issues. If you look at other countries that have had these types of funding issues with their healthcare programs, the way that they respond is through rationing of care. That leads to longer wait times for treatment. That’s my concern, and I just don’t think it’s fair to our senior population that has paid into the program for years. In addition to the funding issues we’re already having, some of the estimates for Medicare for All show that it could cost up to $32 trillion per year, which would essentially result in higher taxes for everyone.

President Trump spent a lot of time criticizing the Affordable Care Act during his campaign. What condition are the ACA individual state markets in today?
When we came into office, we inherited an individual market that was in chaos. Rates for health insurance were going up by double digits every year. Some of the regulations that we’ve put in place have created more stability in the market. Last year, we actually saw a national decrease of about 1 percent overall in insurance rates. But that being said, we put out some data recently showing that people who are not getting subsidized are having a really hard time. About 2.5 million people have left the individual insurance market. That’s basically the unsubsidized population. What that tells us is that the people who are getting subsidies are fine, but the individuals who aren’t subsidized still find Obamacare’s premiums unaffordable.

Adam Wren writes about business, politics, and crime for Indianapolis Monthly—often in the same story.

Follow him on Twitter @adamwren or visit his website at adamwren.me.
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