During his long tenure, Governor Terry Branstad has typically been attentive to the concerns of for-profit corporations. So when the insurance companies picked to manage Medicaid for more than half a million Iowans reported in August that they were losing money on the deal, they got a favorable hearing.
A senior analyst from Iowa’s non-partisan Legislative Services Agency confirmed on Friday that the Branstad administration has agreed to pay an extra $33.2 million to the three Medicaid managed care providers for the contract period beginning on April 1 and continuing through June 2017. I enclose that e-mail below, along with reaction from several Democratic state senators.
Hardly a week goes by without my hearing yet another story about an Iowan hurt by Medicaid privatization. Thousands of people have been forced to change doctors or have lost access to therapy for loved ones. This summer, a survey of care providers for Iowans on Medicaid found that:
90% say their administrative costs have increased;
80% say more health care claims are being denied;
79% of providers say they are not getting paid on time;
66% say they are being reimbursed at rates lower than their contracted rates;
61% say the quality of services they can provide has been reduced;
46% have or plan to cut their services; and
28% have taken out loans while waiting to be paid.
Branstad refuses to adjust his Medicaid policy to help patients who are suffering or care providers struggling to keep the doors open. On the contrary, he keeps spinning tales (backed up by no evidence) about “protecting the interests of the taxpayers” and “stopping significant fraud and abuse.” His administration hasn’t followed up on supposed new benefits for patients and puts out impossible-to-verify accounts of “success stories.”
Critics warned that any money saved by privatizing Medicaid would come at the expense of health care for vulnerable patients. They warned that those apparent savings would evaporate once for-profit insurers demanded more money from the state, as had happened in Florida following that state’s rapid privatization of Medicaid.
Iowa enjoyed low administrative costs under the old Medicaid system. Thanks to our governor and his Republican enablers in the state legislature, taxpayers will now experience the “nightmare” scenario that has already unfolded for Medicaid patients and care providers. Connecticut saved money by moving away from managed care, back to the state-run, fee-for-service model.
Don’t expect anything that sensible from Branstad, who happily spends other people’s money when corporations come calling.
UPDATE: Branstad claimed at an October 31 press conference that the state budget will still save money thanks to efficiencies in the new Medicaid system. If those savings materialize (they didn’t in Connecticut), it will happen through companies denying health care services to Iowans.
SECOND UPDATE: Added below excerpts from an excellent post by Iowa Policy Project Executive Director Mike Owen.