May 21, 2024

Iowa’s Medicaid privatization draws scrutiny

DES MOINES — Gov. Terry Branstad’s plan to privatize the state’s Medicaid program is moving forward, though critics are raising questions about how the shift will impact patients.

Earlier this year, the state began an effort to shift Medicaid administration to two or more managed care organizations, to which Iowa will pay a fixed amount per enrollee to provide health coverage. State officials predict cost savings and say patients will still have access to quality health care. But Democratic Senate President Pam Jochum, of Dubuque, said this week that she is not convinced.

“I am not confident it is going to work well,” said Jochum, whose adult daughter has severe intellectual disabilities and receives Medicaid. She added: “I think the goal from the governor is that we need to privatize everything...Our goal is to make sure people are being served.”

Amy Lorentzen McCoy, spokeswoman for the Department of Human Services, said the new system would save the state money by avoiding duplication of services and by offering better preventative care. The state estimates savings of about $50 million in the first six months of managed care, starting Jan. 1. McCoy said patients will still receive the care they need.

“We are not changing the types of services available through Medicaid. We are not changing the eligibility criteria. What we are changing is how the program is administered,” McCoy said.

Roughly 560,000 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.

Under this plan, the majority of Medicaid recipients would move to the new system. The state plans to establish the new program in January 2016, though it must receive federal approval first. So far, 18 companies have expressed interest in bidding on contracts to provide Medicaid services.

A total 39 states and the District of Columbia contract with managed care organizations, according to the nonpartisan Kaiser Family Foundation.

“I would say it’s a trend. I would definitely say it’s a trend,” said Julia Paradise, associate director of the Kaiser Commission on Medicaid and the Uninsured. She said states make the change for a variety of reasons, including cost savings, budget predictability or quality of care. She said the results have varied by state.

“There’s evidence that managed care can deliver important improvements and there’s evidence that here can be real gaps in access. The actual implementation really matters,” Paradise said.

After the system starts, officials said there will be a transition period in which patients will be able to keep doctors or case workers.

But outside groups are worried about access to care and how much oversight there will be. Jochum has sought legislation that would create an oversight board. That effort won support in the Democratic-majority Senate, but not the Republican-controlled House, though she said Democrats hope to revive it later in the session.

Dee Mahan, the Medicaid program director for Families USA, a nonpartisan health care advocacy group, said transparency was important when managed care companies take over a state program.

“These are still taxpayer dollars which are going for a specific purpose, which is to provide Medicaid .... the state still has an obligation to make sure that is what those taxpayer dollars are doing,” she said.

McCoy said that DHS would be monitoring this shift very closely, noting that it was a “big investment” for the state. She said about 40 state workers currently deal with Medicaid and that those people would keep their jobs and some of them would take on these duties.

Clare Kelly, executive vice president of the Iowa Medical Society, which represents more than 6,000 physicians, residents and medical students, said the society had taken no official position on the change, but cautioned that they were watching closely to make sure patients get care and doctors get paid.

“Change is hard, but this is a big culture shift,” Kelly said.