Seema Verma, the Indiana consultant who injected personal responsibility requirements and health savings accounts into that state's Medicaid program, deserves a shot at working with other states that want to redesign their programs.
She repeatedly testified last week that her main goal for the program, if confirmed as CMS administrator, will be to achieve better outcomes for the vulnerable populations served by the program. “This shouldn't be about kicking people off,” she said.
Yet that will become inevitable if Congress and the White House follow through on their plans to convert the program into either block grants or put a per capita cap on federal expenditures, which she also endorsed during her Senate confirmation hearing. Unless the money funneled through block grants remains adequate, cash-strapped states with balanced-budget requirements will be forced to make difficult choices.
To understand why, simply look at the program's demographics. Only a third of the 74 million people in the program are able-bodied adults. They get the most attention now because their ranks grew sharply after 31 states began offering coverage to working people who earn up to 138% of the poverty level. But even so, able-bodied adults in 2015 accounted for just 36% of overall program spending.
Nearly two-thirds of Medicaid's $545 billion in spending went to the young, the old, the blind and the disabled. About 43% of all enrollees in Medicaid are 18 or younger, and it's over half if you include the Children's Health Insurance Program.
Another 6 million are over 65, so-called dual-eligibles who also qualify for Medicare. They and the 10 million adults who are physically or mentally disabled are heavily dependent on Medicaid to finance their very expensive nursing home and home health care needs. Indeed, those two populations—about 1 in 5 persons on Medicaid—now account for nearly half of all program expenses.