Medicare & Medicaid Administrator Verma Issues Remarks at Healthy Adult Opportunity Event

WASHINGTON, Jan. 31 -- The U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services issued the following remarks by Administrator Seema Verma on Jan. 30 at the Healthy Adult Opportunity Event:

Thank you Secretary Azar and Director Grogan for all of your support on this important policy. Thank you to Governor Stitt for being here and for your commitment to innovation and thinking outside the box. And to Senator Cassidy, for your long standing dedication and commitment to strengthening the Medicaid program.

The Trump Administration's Healthy Adult Opportunity is a groundbreaking new policy that holds the potential to transform the Medicaid program. And it would not have been possible without the leadership of President Trump. I want to thank him for his sincere commitment to caring for America's most vulnerable populations and strengthening and protecting Medicaid.

Before I get into the details of the policy, I'd like to take a few moments to reflect on the Medicaid program and its importance to every American.

To many of us, Medicaid is remote. Most of us are healthy, working, and insured, so it seems unlikely to affect our lives directly. But that sort of detachment overlooks an important reality: the line dividing normality and chaos in any of our lives is thin and fragile. One moment a day looks like any other; the next, a life can be turned upside down.

Maybe it's a car accident that results in a traumatic brain injury; maybe it's a child diagnosed with a debilitating disease that calls for expensive treatments; maybe it's the loss of a job or the death of a family member. Tragedy and bad luck can strike anyone, at any time. When it does people need something to fall back on.

That's what Medicaid is all about. Medicaid is a vital backstop... It's the very foundation of our safety net - a lifeline for millions of Americans. Some might need it for a short time, others for a lifetime. The important thing is that it's there when life - in its unpredictability and unfairness - delivers a gut punch that knocks people off their feet.

At a time when there's so much discussion about government's role in the health system, one thing we can all agree on is that government has a solemn obligation to provide for the most vulnerable amongst us. To borrow a line from Gandhi that the Vice President is fond of paraphrasing: "the true measure of any society can be found in how it treats its most vulnerable members."

As the first CMS Administrator with a background in Medicaid and now as one of the longest tenured administrators - I've come to appreciate that it's not enough to enroll individuals in our programs and call it a day; instead, we must strive to provide high-value, high-quality care to our beneficiaries. That care must help beneficiaries achieve the best quality of life possible and realize their fullest potential.

Part and parcel of that responsibility is ensuring that the program is sustainable... that it's capable of delivering quality care to current beneficiaries as well as future ones.

Unfortunately, Medicaid's capacity to do so is becoming increasingly tenuous. Medicaid is now the first or second largest budget item for states, crowding out other priorities like public safety and education. It's already the nation's largest payer of long-term care, and as the nation's baby boomers age, costs for those individuals is expected to rise 500 percent by 2050. This looming cost crisis threatens the viability of the program./1

Since 2014, Medicaid has added approximately 15 million new working-age adult enrollees who primarily qualify as part of Obamacare's expansion of the program. The program was not originally designed for this group. Spending growth rates in this population are forecast to be higher than in others, and our most recent round of audits demonstrated that many states' practices for verifying eligibility are far too lax. We shouldn't have to tell someone with a disability to get on a waitlist for services because we're diverting precious resources to cover someone who potentially doesn't qualify.

And yet for all that spending, health outcomes today remain mediocre: barely over half of adults on Medicaid report that their healthcare needs were met all the time. And uninsured individuals reported better health status than those on Medicaid.

The Trump administration's Medicaid and CHIP Scorecard - a national and state report card on health outcomes - has revealed numerous challenges facing the program, such as serious failures in treating chronic disease, and too many of these challenges stem from failures in delivering appropriate preventative care.

It's not enough to explain away discrepancies like these as inherent or expected in the Medicaid population. That's a disservice to the 71 million Americans who rely on the program and demonstrates a complacency with the status quo that is not acceptable. We must raise the performance bar when it comes to quality in Medicaid.

And yet problems with Medicaid's structure make it difficult to prioritize beneficiaries and the quality of care they receive. I've been on both sides of the cumbersome back and forth, paper-pushing process we have today. States are trying to make routine changes or craft innovative programs, but are thwarted by the rigidity of a federal bureaucracy rooted in a 1960s program design. The result is a program that is historically too focused on process, rather than outcomes, and is failing to address the needs of our beneficiaries.

And while those that want Medicaid to be business as usual are willing to weaponize the legal system to thwart state innovation at every turn, our administration is committed to protecting and improving the lives of Medicaid recipients.

The Healthy Adult Opportunity represents an innovative and historic approach to surmounting Medicaid's structural challenges. It provides rigorous protections for all Medicaid beneficiaries, and for the first time it aligns financial incentives to improve quality of care and health outcomes for Medicaid adults by giving states unprecedented flexibility to administer and design their programs to meet this population's very unique needs. In exchange for this flexibility, states accept greater accountability for managing the program and demonstrating real results. States have a long history of managing budgets. Every state has already accepted the risk of capped federal funding, either through their CHIP program or an 1115 waiver.

I'm proud to be a part of President Trump's team that developed this opportunity. Washington has a nasty habit of kicking the can down the road on important problems. On issue after issue, President Trump has demonstrated his willingness to buck that trend. I want to thank our partners across the administration and the CMS Medicaid team that have worked so diligently to develop the Healthy Adult Opportunity, as well as all the state Medicaid directors - current and past - who provided vital input into the policy's design.

But I do want to single out one Director in particular for special thanks and congratulations. I'm thrilled to use this opportunity to announce Calder Lynch as Director of Medicaid and CHIP Services. Calder had been in an acting capacity since this past summer and has been instrumental in shaping Medicaid policies - including this one - the last three years. Congratulations, Calder.

With that, I'd like to walk you through some of the policy's details.

The PowerPoint presentation is available at https://www.medicaid.gov/medicaid/section-1115-demo/downloads/how-states-apply/hao-overview.pdf.

Footnote:

1/ https://aspe.hhs.gov/basic-report/overview-long-term-services-and-supports-and-medicaid-final-report#main