Dive Brief:
- Iowa will soon have three health insurers to manage its $7 billion Medicaid program. Elevance and Molina have won contracts to deliver managed care in the state beginning next summer, Iowa announced Wednesday.
- Iowa plans to award the four-year contracts to Elevance’s Amerigroup Iowa, which already has a Medicaid contract in the state, and newcomer Molina Healthcare of Iowa, starting in July 2023, the Department of Health and Human Services said.
- Iowa Total Care, which is owned by Centene, has a managed care contract with Iowa that lasts through 2025.
Dive Insight:
Starting next year, Centene, Elevance and Molina will help managed Iowa’s Medicaid program, which supports more than 790,000 low-income residents of the state.
It’s Molina’s first contract in the Hawkeye State, as the California-based insurer continues to grab Medicaid market share following last week’s California win. California — the largest Medicaid market in the country — also awarded Medicaid contracts to Elevance and Centene.
Centene lost contracts in three counties, including Los Angeles, causing shares in the company to flag. The insurer voiced disappointment over the decision, and said it was evaluating all options to appeal.
Iowa said the addition of a third managed care organization to its Medicaid program should increase choice for consumers, and help the state as it looks to increase community services, improve maternal health, support foster care through Medicaid and improve administrative services.
The state legislature voted to privatize Medicaid in 2016 in a controversial decision, as providers said handing the program over to for-profit entities would create barriers to healthcare access. Originally, three payers held managed care contracts, but AmeriHealth Caritas withdrew in 2017 and UnitedHealthcare in 2019, citing major financial losses due to their contracts in the state.
Five vendors bid for contracts following Iowa’s request for proposals in February. Of those bidders, Aetna Health of Iowa and nonprofits CareSource Iowa and UCare Iowa were not selected.
DHHS did not say why those bidders did not receive contracts. But according to a Des Moines Register review of the proposals, officials found weaknesses in individual applications, including limited managed care experience and lack of specifics on how initiatives would be carried out.
The contracts awarded Wednesday are worth roughly $6.5 billion each year.