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November 30, 2016

It’s unusual for an incoming president to name a head of the Centers for Medicare and Medicaid Services (CMS) as early as president-elect Trump’s nomination on Tuesday of Seema Verma to the post, experts say. But seniors worried about possible changes to Medicare probably shouldn’t read too much into that move.

CMS has oversight of Obamacare’s federal health insurance marketplace as well as Medicare. And Trump’s swift nomination likely reflects his plans for the former program more than the latter. It remains to be seen whether an effort to overhaul Medicare will accompany Trump’s efforts to dismantle Obamacare.

Verma, the founder of a health policy consultancy, will serve under Tom Price, whom Trump has tapped to head the Department of Health and Human Services, if both appointees are confirmed by the Senate as expected. Price, a Republican congressman from Georgia, chairs the House Budget Committee.

Typically, the CMS administrator is not among the first positions announced by an incoming president, says Dr. Robert Berenson, a fellow at the Urban Institute, a nonpartisan research organization and a former CMS official. The quick nomination of Verma to the post, he says, signals that “they need someone on the ground from day one” to help tackle the administration’s promise to repeal and replace Obamacare. Verma has close ties to Vice President-elect Mike Pence, having helped the Indiana governor implement the expansion of Medicaid in that state.

House Speaker Paul Ryan is eager to overhaul Medicare, the federal insurance program for 56 million Americans ages 65-plus and younger people with certain disabilities. He has said that any effort to repeal Obamacare would have to include changes to Medicare. His proposal would transition Medicare to a program of “premium support,” whereby beneficiaries would get a fixed contribution from the government toward their care. This would likely mean that beneficiaries who choose the most comprehensive coverage would have to shoulder a higher portion of the cost themselves.

Even as Trump made repealing Obamacare a central part of his presidential campaign, he remained largely silent on Medicare. His transition website mentions “modernizing Medicare,” a hint that he might be open to changes.

Without 60 Republican votes in the Senate, lawmakers are unlikely to fully repeal Obamacare or to pass new legislation reshaping Medicare. But a partial dismantling of Obamacare and restructuring of Medicare could both be accomplished under a budgetary procedure known as reconciliation, says Dan Mendelson, president of Avalere, a Washington, D.C.-based health care consulting firm.

Under this procedure, Republican leaders in Congress could work closely with the White House chief of staff and the head of Health and Human Services to eliminate the subsidies that help moderate-income Americans buy their health insurance on the Obamacare marketplaces, and to enact cost-cutting measures in Medicare. (The Obamacare provisions that affect Medicare, such as the introduction of certain free preventive services, cannot be changed through reconciliation, the New York Times reported.)

It isn’t clear how much appetite there is in Congress to make big changes to Medicare. Medicare is a popular program, and the idea of premium support has historically been a “political loser,” Berenson says. Despite Ryan’s wishes, lawmakers might decide that dismantling Obamacare and coming up with some sort of replacement is enough of a heavy lift, and postpone Medicare reform.

Even if Medicare changes remain on the front burner, it isn’t known how much of a role Verma will play in it. Since her background lies more in Medicaid, she might defer to Price, a former orthopedic surgeon, on the big Medicare issues, Berenson says. Or it’s possible that neither will have as much sway as the occupant of the White House. “Personalities matter a lot,” Berenson says. “If I were the CMS administrator, I would at least want to be in on the meetings.”

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