Iowa Moves Forward With Medicaid Managed Care, but Critics Keep Up the Fight

Throughout Governor Terry Branstad's effort to bring Medicaid managed care to Iowa, critics have questioned whether it will limit access for beneficiaries. Contracts have been signed, and now savings are being questioned.

The contracts have been signed. A start date of January 1, 2016, has been set for the start of Medicaid managed care in Iowa. But critics of Governor Terry Branstad’s plan to move 560,000 beneficiaries continue to question the move, and are now asking whether the promised savings will materialize.

At this week’s press conference, Brandstad defended the way his Department of Human Services (DHS) estimated the amount of savings—pegged at $51.3 million for the first 6 months—saying the Department relied upon seasoned actuaries who have worked for the agency for years. When asked about calls by Democratic legislators to produce documents about how the savings were calculated, Radio Iowa reported that the Republican governor said, “First of all, I don’t have any.” All information rests within DHS, he said.

Michael Bousselot, Branstad’s chief of staff, promised to “work with” legislators, as well as reporters, who have sought information on the estimates.

On October 9, 2015, the Branstad Administration announced it had signed contracts with 4 previously announced winning bidders to manage elements of Iowa’s $4.2 billion Medicaid program. Bidders were selected through a competitive process that began in the spring. The 4 contractors are Amerigroup Iowa, Inc.; AmeriHealth Caritas Iowa, Inc.; UnitedHealthcare Plan of the River Valley, Inc.; and WellCare of Iowa, Inc., according to DHS officials.

“Together with these four partners, we are modernizing the Medicaid program in a way that focuses on patients’ individuals needs and on providing a higher quality of care,” Iowa Medicaid Director Mikki Stier said in a news release announcing the new contracts.

Iowa officials have tried throughout to emphasize the goals of improved quality and access to care, but Democrats say the goal is simply to cut cost and fear that access will actually deteriorate. They have criticized separate decisions to close a pair of mental health hospitals as a size of bad things to come. The Branstad administration said the experience of bringing elements of managed care to Iowa’s mental health care delivery has been positive overall—a point that has been confirmed by some advocates—and that the rest of the Medicaid system would benefit from more reliable budgeting and coordination.

Branstad Administration officials began warning last fall of the move to managed care because of the upward trajectory in Medicaid spending, which they said was not sustainable. Privatization is aimed to rein in a budget that grown 73% since 2003 to more than $4.2 billion.

Democrats are not the only critics at this point. Losing bidders, including Aetna Better Health, Iowa Total Care, and Meridian Health Care Plan of Iowa, have challenged the selection process.