There appears to be consensus among Democrats and Republicans in the Iowa Legislature that there are problems with the state’s privatized Medicaid program, but there is less agreement over what, if anything, legislators should do about it when they return to the Capitol in a few weeks.
Lawmakers in the Republican-controlled statehouse are expected to address a range of topics when they gather in January, including taxes and water quality. But Medicaid, the massive health care program for poor and disabled people, is less certain to be on their to-do list. That’s because there are a range of opinions on whether lawmakers should enact legislation to respond to ongoing issues, or if change should come administratively through the state agency that contracts with private insurance companies now running the program.
During a recent legislative health oversight meeting in Des Moines, lawmakers from both parties agreed that reduced coverage on a type of coordinated care service was not communicated fairly to affected providers and patients. But legislators offered broad ideas on how to proceed, ultimately agreeing to follow up on the issue.
Sen. Mark Costello, a Republican from Imogene who led the meeting, later said while he has frustrations with the privatized Medicaid system, he thinks those issues can be figured out without introducing a bill.
“My hope would be that we can work it out without making legislative changes,” he said. “If we find some that we feel are necessary, I’m not ruling that out.”
Sen. Mark Chelgren, an Ottumwa Republican, said after the meeting that he is open to legislative activity, though he declined more specifics. He noted the private insurance companies, known as managed care companies or MCOs, are required to do things differently with updated language in the state contracts they sign.
“The contracts define what the roles and responsibilities are of the state versus the roles and responsibilities of the MCOs,” he said. “Therefore the only way to change those contracts is if the state changes the laws.”
Rep. Lisa Heddens, a Democrat from Ames, said the meeting offered a clear indication that both parties want action, adding, “There’s a little more of a drive behind us to do something legislatively.”
Iowa’s Medicaid program, which was privatized in 2016, 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 roughly $4 billion program, which is funded through a combination of federal and state funds, serves more than 600,000 people.
Democrats, in the minority and with little legislative power, sent an open letter recently to Reynolds and Republicans that alluded to switching back to a state-run program.
Republican Gov. Kim Reynolds is a staunch supporter of Medicaid privatization, which was created when she was lieutenant governor for former Gov. Terry Branstad. He pushed privatization without legislative approval, arguing it would save the state money and provide better care to patients. Reynolds has maintained that argument.
There is inconclusive data available on whether Iowa has saved money or provided better care, though state officials insist it’s happened. A state ombudsman office that receives calls about privatization released a report recently that said reduced, denied or terminated services were a top complaint lodged against the program between portions of 2016 and 2017. Meanwhile, some health care providers that treat Medicaid patients say they’re not getting paid on time or they’re being denied full reimbursement for services they’re providing. One lawsuit claims the system has hurt health care access for disabled individuals.
Representatives for the insurance companies have defended their work and say they’re improving the system. Officials for DHS, the state agency that could be expected to make changes if lawmakers don’t step in, have also defended the program and mostly praise it.
Brenna Smith, press secretary for Reynolds, declined to answer directly whether the governor thinks the Legislature should play a role in changing Medicaid. Smith said in a statement that Reynolds and her administration “look forward to working with legislators to ensure our Medicaid program is improving quality and access to care.”
A message left for Senate leadership was not returned, but House Speaker Linda Upmeyer, a Clear Lake Republican, said in a statement she believes new leadership at DHS can handle need changes.
Jerry Foxhoven became the department’s director earlier this year, and a new administrator was hired recently to oversee Medicaid. That official, Michael Randol, ran a privatized Medicaid program in Kansas that has had similar complaints about reduced care.
“I think they may have some new ideas to improve our system without legislative approval,” Upmeyer said of the new DHS staff, adding she’s “happy to work with them on that.”