Iowa Medicaid Managed Care Proposal Hits Opposition

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Senators passed a bill to turn the transition over to a commission, while the state's largest newspaper called the plan a giveaway for private firms.

Governor Terry Branstad’s plan to turn Iowa’s $4.2 billion Medicaid program over to managed care hit stiff opposition in the state Legislature last week, with the Senate voting to create a commission to handle the process.

The bill’s sponsor, Sen. Amanda, Ragan, said legislators need more say in the process. Several legislators criticized Branstad’s longtime Human Services Director (DHS), Charles Palmer, for recommending closing 2 mental health facilities without adequate involvement from lawmakers. Democrats in the Senate from approve Palmer’s reappointment for him to say in his job.

And on Sunday, the state’s largest newspaper, the Des Moines Register, published a blistering editorial, under the headline, “Medicaid plan is a gift for private firms.”


The newspaper drew on numbers from a series of town hall meetings that DHS has held around the state, writing, “They emphasize that Medicaid has grown 73% since 2003. They do not share that the cost of employer-based health insurance in Iowa has grown about 80% over the same period. …”

Also, the Register cited statistics that state Iowa’s per-person Medicaid costs are less than 29 other states and less than private coverage. For adults who are not seniors or disabled, costs are below 47 others states, according to the Kaiser Family Foundation, which regularly reports and tracks Medicaid data.

Multiple states have switched to managed care for Medicaid services to use a per-person monthly fee model to bring predictability to budgeting, which is one of the arguments being used in the Branstad administration’s pitch. Many transitions have been rocky, however, with complaints of disruptions of service, especially for vulnerable clients, some of whom became separated from longtime service providers.

The Iowa Hospital Association has voiced concerns about denial of services in a move to managed care.

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