DES MOINES — Turning Iowa’s Medicaid program over to private operators will save money and improve service, a top state official said Wednesday, but lawmakers questioned how it would impact people enrolled in the program.
Department of Human Services Director Chuck Palmer told the Legislature’s Health and Human Services Appropriations Committee that the state is moving forward with a plan to shift the Medicaid program to two or more managed care organizations, to which Iowa will pay fixed amount per enrollee to provide health coverage.
“We can have a better health care delivery system,” said Palmer, adding the change would provide “budget stability and predictability moving forward.”
Roughly 550,000 people are enrolled in Iowa’s Medicaid program, which provides care to poor children, families and disabled people, as well as some low-income adults. It is funded with $4.2 billion in state and federal dollars.
Some of those people are already in managed care programs, but this plan would shift the majority of Medicaid recipients to a new system. Palmer said it was in an effort to hold down costs, while still providing effective care.
The state plans to establish the new program in January 2016, though it must receive federal approval first. According to a DHS presentation, 39 states and the District of Columbia contract with managed care organizations.
Palmer estimated that the state would save about $51 million in the first six months of 2016. He also said some state jobs may be impacted, but did not say if that meant layoffs.
Democratic Sen. Joe Bolkcom, of Iowa City, said lawmakers need to closely monitor the new system, noting that he’ll hear from constituents if there are changes to quality of care.
“It really requires that we have a well-designed plan and that we do good oversight,” Bolkcom said.
The state will hold a series of public meetings around Iowa to talk with them about the plan.