Verma, who has been described by the White House as the "unquestionably qualified" first generation Indian-American, was confirmed by the Senate by a vote of 55-43.
She is likely to play a key role in the health care reform of US President Donald Trump, who has made it a priority to repeal and replace the affordable healthcare of his predecessor Barack Obama.
The second Indian-American in the Trump Administration to be confirmed by the Senate, Verma would head the USD 1 trillion Centers of Medicare and Medicaid Services that provides health services to 130 million people.
The Senate vote on Verma's confirmation was mostly on party lines.
A health policy consultant, she is known as the architect of health care reforms in several states, including Indiana.
Senate Majority Leader Mitch McConnell said Verma is extremely qualified with a health policy background and a record of success.
"She is committed to protecting Medicare and modernising Medicaid so the programmes deliver the best results for those who need it. She also understands the challenges that Obamacare has created for families," he said.
However, Democratic Senator Kamala Harris, the first Indian American Senator voted against Verma.
"I voted no on Seema Verma to head Medicare and Medicaid. I disagree with her ideas to cap and cut Medicaid and her views on maternity coverage," Harris said.
(Reopens FGN 3)
Senator Mark Warner, Co-Chair of the Senate India Caucus, also voted along party lines.
"During the confirmation process, I was not satisfied by Ms Verma's answers to key questions regarding the future of these programmes," he said.
"CMS accounts for one-quarter of the federal government's spending, and these programmes face difficult and complex challenges that will only get worse if this administration succeeds in taking insurance away from millions of Americans by repealing the Affordable Care Act," Verma said.
