Iowa’s shift to privately-managed Medicaid will save the state 80 percent less money this year than originally predicted, according to a new state estimate.
A quarterly report prepared by Iowa Department of Human Services staff members says the state now stands to save $47.1 million this fiscal year by having private companies manage the $4 billion program, the Des Moines Register reported Saturday.
Former Gov. Terry Branstad, who ordered the privatization that began in 2016, had declared the move would save the state $232 million in fiscal year 2018.
A spokeswoman for Gov. Kim Reynolds, a Republican who succeeded Branstad and supports the shift to privately-run Medicaid, says Reynolds’ new Medicaid director believes his staff miscalculated the 2018 savings estimate. He is having them review the issue, spokeswoman Brenna Smith said.
Reynolds’ support for the change to privatization remains strong, Smith said.
“The governor believes Medicaid modernization is a proactive, patient-centered approach and remains committed to improving access, quality of care and accountability for patient outcomes,” she said.
A leading critic said the drastically lower estimate of state savings for 2018 is more evidence that privatized Medicaid has been a failure.
“This has become just a shell game,” state Sen. Joe Bolkcom, an Iowa City Democrat, said.
Iowa’s Medicaid program has been under extra scrutiny in recent weeks. One of the three insurance companies overseeing the system dropped coverage recently over failed negotiations with the state over money. Since then, the Iowa Department of Human Services announced there would be limited choice temporarily for patients between the remaining two companies.
The program, which is funded through a combination of federal and state funds, serves more than 600,000 people.