Q&A: No place like home

American Experiment President John Hinderaker interviews Senior Policy Fellow Peter Nelson about his work in the Trump administration, D.C. vs Twin Cities living, and what his double-full-circle career means for health care in Minnesota and America.

Peter Nelson returned to Center of the American Experiment in June after serving over three years with the Centers for Medicare & Medicaid Services (CMS). Originally from Edina, he used all the health care expertise he acquired during his time in the Twin Cities metropolitan area to craft federal policies that benefit hundreds of millions of Americans. Now he’ll further some of those initiatives in his home state as well as in others that seek his prowess to improve their health care systems.

Peter, you’re rejoining us after a 3 ½-year absence to work in Washington, D.C. Before we talk about that, let’s back up a little bit. You started at American Experiment when?

Back in 1997, shortly after I graduated from Wheaton College. That’s actually when I was first introduced to health care policy, through a research project studying small business purchasing cooperatives. And then I ended up going to law school and didn’t have plans to come back to American Experiment. But one thing led to another and I landed back here after law school, specializing in health care policy for a large part of my job. Although, as you know, I pursued a number of other policy areas in Minnesota.

So in 2017, you got an offer to take a high-level position in the Trump administration, specializing in health care regulation.

It was a move I was not expecting. Someone reached out to me for my resume and said, “We think you’d be the ideal person for a position at CMS.” It was from the Centers for Medicare and Medicaid Services. There was a focus on stabilizing the individual health insurance market. It was in shambles when the Trump administration came into power. Premiums had increased — doubled since Obamacare was implemented — and insurance companies were fleeing the market. They were very focused on fixing those problems.

At the time I was working on individual market issues in Minnesota, finding ways employers could actually move into the individual market and finance plans for their employees to give them more choice and flexibility. That was a big part of the Trump administration agenda, to give states more flexibility to come up with their own solutions. They knew states were closer to the ground and therefore knew their markets better than Washington knew their markets. CMS was ready to implement the right policies for America, and this was an opportunity I couldn’t pass up.

What was your job title and who was your boss?

I was the senior advisor to the administrator, Seema Verma. I believe she was the longest-running administrator at CMS. It was really a privilege to work with her and for her. We accomplished so much during our tenure. We had 16 initiatives that we were driving throughout that time, and I was primarily involved with two of them.

What were you specializing in?

One area was price transparency. It’s really hard to know the price of care before you get care. In fact, it’s by design. The insurance companies and the hospitals don’t want you to know the price. By hiding it, they defeat competition in the marketplace, which leads to higher prices and bigger profits for them. Prices are central to any market. They guide a market and if you don’t know the prices, there’s no competition to drive prices down.

The other was the insurance market space. I focused on stabilizing the insurance markets and that involved working on health insurance exchanges. We implemented reforms to make sure the markets run optimally. For instance, there were rules in place that allowed people to sort of game the process, waiting until they were sick to enroll. We tightened up those requirements to make sure people were continuously covered. It’s better for the insurance market and better for you, the individual.

So put all that in a nutshell.

It gets very technical. A lot of it was giving states the power and flexibility to oversee rules and requirements because states are in a better position to assess the situation. This promotes a stable marketplace. The prior administration was not interested in pushing rules that worked for the entire marketplace. They were just focused on enrolling more people, which led to a lot of premium increases.

What was it like to work in the Trump administration?

It was nonstop work, never boring. There was always something going on and the pace was pretty crazy. There were a lot of different people we got to work with. Great people. I even did some of my work on the White House grounds at the Eisenhower Executive Office Building, where we held regular meetings to work on issues that crossed agencies. That was another thing about my job that was so interesting: Working with people at Treasury and people at Labor because a lot of these issues cross these agencies. It was a very collaborative environment. One thing that surprised me was how well the process worked among so many stakeholders. We just got in a room and worked through it all to craft what was really the best policy for America.

What kind of guidance did you get from on high? Were the politicians in there, telling you what to do? Were lobbyists running the process?

My experience was that the Trump administration hired really good people to develop and implement good policy. We were largely left to do our jobs. Of course, we listened to every special interest because you need to hear everyone out when you’re developing policies. But the special interests never drove policy. We were free to set policy based on what we thought was best for America.

What was it like to live in Washington, D.C.?

I wish I could say I had a lot of time to really live there but the pace was pretty hectic so there wasn’t much time to really experience the city. But I’ll admit, the weather was something I couldn’t stand. When summer hit, the heat and humidity were too much for me to bear. I would trade three months in hot, humid D.C. for three months in a cold Minnesota winter any day. If you’re not from Minnesota, you don’t understand how much people from Minnesota can miss Minnesota, so I’m glad to get back to our winters.

But it’s our nation’s capital. It’s a great place to be. There’s so much happening. I had an apartment less than a mile away from my office, which was right across the street from the Capitol. There are obviously great restaurants in the area. And the Nationals’ baseball stadium was only two blocks away. Back in 2019 I got to go to a lot of the key games that led to the Nationals winning the World Series. That was a really exciting time.

I always think that most people in Washington consider the Democrats to be the home team. How was it being a member of the Trump administration in that environment?

When you’re talking about certain policy areas in D.C., that’s particularly true, and it was certainly true with health care. The Left tends to dominate the health care space so we were constantly under attack when we were promoting our policies. There are really smart conservatives supporting a movement toward a more consumer-driven health care system. But they are swamped — by the sheer number of special interests working for the Left. It was a constant fight, responding to our critics and having to deal with politicians in Congress who weren’t happy with the direction we were going. It certainly didn’t make our jobs easier. But that’s politics and that’s D.C.

With a new administration, a lot of people are wondering what will be undone easily and not so easily.

I’m hopeful a number of key initiatives will persist, starting with price transparency. That policy is just common sense. I’m optimistic the work we did on health reimbursement arrangements will also move forward. These are opportunities for employers to fund individual market coverage policies, pre-tax, which is something that could transform and strengthen the individual insurance market and make it more competitive. That’s also common sense and I think it’ll move forward.

Those are two good examples of ideas the Obama administration never pursued. It might not be that they opposed those policies. It just wasn’t their priority. But we had a priority to make the markets more competitive — to take advantage of competition to drive toward a better health care system.

I do worry that some of our policies that give states more power to find their own health care solutions will fall by the wayside. Checks and balances are there but elections matter. That’s politics.

One of the areas you are really an expert in, Peter, is health care policy at the state level, and what states can do within the federal framework that, for better or for worse, we’re dealing with. This puts you in an ideal position with a state-based think tank.

That’s what positioned me for the federal government job as well. They were looking for people with experience at the state level because Republicans and conservatives generally think the states are better at coming up with solutions. I worked on 1332 waivers when I was in D.C. These are waivers from Obamacare rules that allow more state-based initiatives to improve their health insurance markets. While the Biden administration will likely try to limit flexibility under 1332 waivers, states should still pursue them. That said, states continue to be the primary regulators of insurance and will need to continue to assert this authority to advance policies to ensure a stable, competitive insurance market.

When you were with American Experiment before you went to Washington, you were highly respected in the Minnesota Legislature and you were frequently in St. Paul to testify before committees. Do you look forward to getting back to that and guiding our state on health care?

Absolutely. There are a lot of things I missed when I went to the federal government and that’s definitely one of them. Getting out to St. Paul, walking around the Capitol, getting things done. The state level is where the action is. That’s where you can really have substantial influence and advance real policy solutions. When I left Minnesota, I knew it wasn’t long-term because I loved what I did before so much. It really was a joy to work at the State Capitol with so many good legislators and staff. And working with other people at American Experiment, we accomplished so much before I left, and I know that work continued while I was gone. I’m excited to pick it back up.

One of the things we’ve been doing the last few years is working with groups in other states, having more and more impact, not only here in Minnesota but in other places around the country. It seems to me you’re in a great place to share your expertise not only here in Minnesota but to advise other states as well on how they can maximize their health care policy.

That’s exactly right. At CMS, I worked directly with state regulators on health insurance marketplace issues. They are eager to reform their systems, to make them work better. Sitting down in a room with state regulators and trying to come up with solutions was one of the more enjoyable parts of my job. That was something people appreciated about the Trump administration, our eagerness to work with the states. It wasn’t an adversarial environment. It was a how-do-we-make-this-work-for-you environment. So I’m excited to hear about our expanding work and presence in other states, and I’m definitely eager to work with them.

Well, Peter, we’re delighted to have you back and we know you’re happy to be back as well.

I could not be happier to be living among family and friends again. I have friends in D.C. but, you know, Minnesota is home. I want to enjoy all the things Minnesotans love to do. I just got back from the North Shore a few days ago. It’s one of my favorite places to visit and now I can run up there any weekend I choose.