Iowa Will Continue Medicaid Managed Care, Despite Senate Opposition

Published March 3, 2016

On February 11, the Democrat-controlled Iowa Senate approved Senate File 2125, which would terminate the state’s contracts with private insurance companies managing health care plans for Iowans on Medicaid, by a vote of 29–19.

According to a report by the Des Moines Register, the Republican-controlled Iowa House is unlikely to repeal the existing managed-care model, touted by Gov. Terry Branstad (R) as a way to contain Medicaid’s $4.2 billion cost and “improve patient outcomes” for the 560,000 Iowans served by the program.

Runaway Costs

John Hendrickson, president of the Public Interest Institute, says Branstad’s managed-care plan will save taxpayers money.

“Senate and House Democrats tend to believe and argue that the governor’s plan will reduce the quality of care and create gaps in coverage,” Hendrickson said. “I believe that if the plan is prevented, it will result in the costs of Medicaid increasing in Iowa.”

With or without Branstad’s managed-care plan, Iowa’s Medicaid costs are out of control, Hendrickson says.

Too Big to Fail

Nicholas Horton, a senior research fellow at the Foundation for Government Accountability, says at this point the only solution to the cost problems posed by Iowa’s expanded Medicaid program is too roll it back. The program was expanded under provisions contained within the Affordable Care Act in 2014.

As of November 2015, more than 600,000 Iowans were enrolled in Medicaid or the Children’s Health Insurance Program.

“No tweaks or minor changes to the program can solve these fundamental problems,” Horton said. “Iowa should start working to unwind its Medicaid expansion now and make the truly needy their top priority.”

Horton says Iowa officials grossly underestimated the number of people who would sign up for Medicaid, a problem Arkansas shares, as he and coauthor Jonathan Ingram noted in Arkansas’ Failed Medicaid Experiment: Not a Model for Nebraska, a study published in January by the Platte Institute for Economic Research.

“Iowa’s expansion has enrolled more able-bodied adults than the state said it would ever possibly enroll—over 120,000 adults,” Horton said. “These enrollment and cost overruns are putting truly needy Iowans at risk, thousands of whom are sitting on Medicaid waiting lists right now, waiting for care.”

Michael McGrady ([email protected]writes from Colorado Springs, Colorado.