As predicted, the Branstad-Reynolds administration’s decision to privatize Medicaid is not working. It’s not working for those who receive and desperately need Medicaid services. It’s not working for care providers who are seeing delays in processes and payments. Now, it’s clear it isn’t even working for the managed care companies.
In February, the three private managed care companies told legislators that they’re losing $450 million.
Subsequently, the Branstad-Reynolds administration signed contract amendments with all three companies agreeing (after a certain point) for the state to bail out the system by taking on more costs just to ensure that the managed care companies continue making a profit. This is completely contrary to the premise of privatizing Medicaid, which is supposed to move the risk to the insurance companies and bring stability to the state budget.
The revised Medicaid privatization plan will allow an additional $235 million in taxpayer money to go to out-of-state, for-profit companies. This is on top of the $130 million they received from the Branstad-Reynolds administration in October. In one year, Iowa taxpayers have coughed up more than $365 million above what was agreed to, in support of corporations that are not providing promised health care to Iowans.
All of this has been done without consulting the Legislature on a critically important program for the Iowans who count on Medicaid services.
Iowa had one of the best-run Medicaid programs in the country. Many innovative, cost-effective strategies were just getting off the ground when Branstad-Reynolds unilaterally decided to privatize the program. Legislative Democrats said all along that privatized managed care was wrong for Iowa, especially for people with disabilities and other long-term needs.
The only way to reduce costs and ensure a profit for private companies is to deny, delay and drastically reduce services, while also cutting back on the amounts paid for them. The real tragedy here is that Iowans are the ones suffering while picking up a hefty tab to make private companies profitable.
This was an ill-conceived gamble by Branstad-Reynolds, and it has failed both the Iowa taxpayers and the Medicaid recipients we should be protecting.
STATE SEN. NATE BOULTON, D-Des Moines, represents District 16 in the Iowa Senate. The district includes east Des Moines and Pleasant Hill. He can be reached at nate.boulton@legis.iowa.gov or 281-3371.