John Kasich

The last time Gov John Kasich wanted to change the Medicaid program by charging a fee to enrollees, the federal government turned him down. But he has revised the idea -- and President Donald Trump has picked a national Medicaid administrator who happened to work with Kasich's administration on the last one.

(Pablo Martinez Monsivais, Associated Press)

WASHINGTON -- Last year, Ohio Gov. John Kasich asked the federal government to let Ohio charge Medicaid patients a fee to help cover their healthcare. It would give the patients, many close to the poverty line, more responsibility for their healthcare, the state said, and save Ohio money.

President Barack Obama's administration said no, persuaded that some poor people would lose their coverage.

But the government could be far more receptive to a modified request Kasich says he will make this year. That's because a consultant who helped the Kasich administration write its last proposal could soon run the federal Medicaid and Medicare programs.

The consultant, Seema Verma, nominated by President Donald Trump to manage the Centers for Medicare and Medicaid Services, made clear at a U.S. Senate committee hearing Thursday that she wants to give states far more flexibility to run healthcare programs as they see fit.

"I think we need to have a program that is flexible and allows states to do what is best for them," Verma said at a confirmation hearing

Seema Verma highlighting the need for faster CMS Medicaid waiver process. That is a huge improvement that can be made ASAP. — Jason O'Rouke (@GAPolicyWonk) February 16, 2017

Medicaid covers health care for the poorest Americans, but the Affordable Care Act let states raise eligibility to 138 percent of the federal poverty level, or $16,243 a year for an individual. Ohio did so, helping more than 700,000 residents gain coverage. But since the federal government provides nearly all the money, the state must follow federal rules.

Verma's answers appeared to please Republicans on the Senate Finance Committee. They frequently complain of overly prescriptive rules from Washington. And she comes to Washington with credentials for change, since she helped implement Indiana Medicaid changes that, unlike Ohio's, got federal approval.

Verma could also help implement other changes -- ones that Republicans want and Democrats fear.

Neither a committee nor a floor vote on her nomination have been scheduled but she is likely to be confirmed, since the GOP holds a majority. Senate Democrats such as Ohio's Sherrod Brown say they'll vote against her.

Proposals Verma has endorsed in the past would return health care to "the healthy and the wealthy," said Sen. Ron Wyden of Oregon.

Said Verma: "I think the president and I are both committed to coverage," and to making "sure that all Americans have access to affordable, high-quality healthcare."

Here's what the differences are about.

Big on flexibility:

Verma has an Indiana-based consulting firm, SVC, and helped Indiana develop Medicaid changes that resulted in families paying a fee that goes to help pay for their healthcare. The system was implemented under then-Gov. Mike Pence, a Republican who is now the country's vice president.

People earning up to 138 percent of the federal poverty level pay up to 2 percent of their incomes, with a maximum of $27 a month, while the state's poorest residents pay only $1 a month. The money goes into a personal or family health savings account, so it is still used for care, starting with deductibles in their state-issued health care policies. The system helps the state money.

Proponents say this is about far more than government savings. By putting in some of their own money, patients are empowered to take more responsibility for health care spending.

Skeptics say it's just a way to shift costs to patients, and they note that failure to pay can get a resident kicked off or, if truly poor, into a less generous array of benefits with co-payment requirements. But Verma disagrees, and a 2016 study by the Lewin Group found a large majority of participants were satisfied with the program.

"What we find is that just because people are poor, that doesn't mean they are not capable of making decisions," she said at the hearing. Participants putting money into their own accounts, she said, "had better health outcomes." They were more likely to seek care when needed, to get preventative care and to choose a primary care provider.

Ohio U.S. Sen. Rob Portman asked her what's the best thing about the Indiana program.

"It gives dignity to individuals," she answered. "It empowers them. It gives them potential to fulfill their dreams."

Relationship to Ohio:

Verma, who holds a master's degree in public health from Johns Hopkins University, has consulted with states including Ohio, Tennessee and Kentucky. She also has worked with healthcare and tech companies that dealt with Indiana's Medicaid system but as a consultant was not bound by state conflict-of-interest laws. Nevertheless, she said Thursday, she recused herself from discussions and decisions if they involved potential conflicts of interest.

In Ohio, she helped the Kasich administration with a proposal requiring all Medicaid patients to contribute 2 percent of their incomes, but not more than $99 a year, into health savings accounts.

Democrats lobbied against the plan. "Out of pocket costs should never prevent Ohioans from seeking care for themselves or their child - especially individuals who rely on Medicaid," Brown said at the time.

The Centers for Medicare and Medicaid Services, or CMS, turned down Kasich's plan.

CMS said the request would "undermine access to coverage and the affordability of care." It also would make people lose coverage indefinitely if they were in arrears, unless they paid up, which would "lead to a substantial population without access to affordable coverage," CMS said in its rejection letter.

Kasich's new proposal:

In a new budget blueprint released in January, Kasich proposed a modification of the original idea. He would make childless, able-bodied adults pay about $20 a month if their incomes were above the poverty level.

This would save about $100 million a year, the state said.

The proposal requires legislative approval. State officials told cleveland.com that Verma did not work on this latest blueprint, and a request to CMS has not yet been drafted.

Kasich and a number of other governors did, however, write to the Senate Finance Committee to offer support for Verma's nomination.

Other issues:

Talk of flexibility from Washington dominated the hearing Thursday, and Verma stressed the payment idea as one of empowerment, not punishment. The experience in Indiana, she said, shows "that we can empower individuals to have power over their health."

But Democrats did not appear persuaded by this or several other answers. Verma would not give firm answers when asked whether certain health insurance benefits, such as maternity care, should be part of a guaranteed suite of care -- as it is now under the Affordable Care Act, or Obamacare -- or whether women should pay more for it.

I asked Seema Verma a simple question in @SenateFinance but she would not answer yes or no. Should women have to pay more for healthcare? pic.twitter.com/vZonCINb14 — Sen. Debbie Stabenow (@SenStabenow) February 16, 2017

She emphasized access to care and choice. On other issues:

Asked if she would support raising the eligibility age of Medicare, which covers seniors, to 67 or higher, she would not answer specifically, saying that was a decision for Congress. "I think it's the role of the CMS administrator is to carry out the laws enacted by Congress," she said. Before he was nominated by Trump to be secretary of health and human services, then-Rep. Tom Price endorsed considering an age hike. If she is confirmed Verma would serve directly under Price.

Asked about turning Medicaid into a block grant, so states could get a lump sum and decide how to spend it, Verma appeared to favor it as a possible option, and she mentioned a similar concept of providing a payment to states on a per-capita basis. "I think anything should be on the table that can improve healthcare for this very vulnerable population," she said.

Asked about turning Medicare into a voucher program, which could hand its control to the private sector, Verma said no. Yet she appeared to support a broader program that included "choice," a term often used by conservatives when discussing vouchers as part of an array of options. "What I do support is giving choices to seniors," she said.

Said Ohio's Brown: "I would hope you would look at CMS as a platform to stand up to Secretary Price and President Trump against raising the eligibility age for Medicare or privatizing it because both would be devastating to working Americans."