WIUM Tristates Public Radio

State Senator: Privatizing Iowa's Medicaid Not Working

Apr 11, 2017

State Senator Rich Taylor (D-Mt. Pleasant) believes Iowa's Medicaid system is failing because of the decision to privatize it and that it could take federal intervention to save it.

Taylor points to the problems the state of Kansas experienced in its effort to privatize Medicaid services.

The federal government sent a letter to state leaders in Kansas this year denying the state’s request to extend its privatized system for another year. The denial was linked to an audit that revealed concerns about agency cooperation and accountability.

“I’m afraid what’s going to happen, the federal government is going to step in,” said Taylor. “Or actually, what I am hoping will happen is the federal government will step in and say [Iowa] has got to take [Medicaid] back over as a state and get rid of the MCOs.”

Three managed care organizations [MCO] have been in charge of Iowa’s Medicaid program for roughly one year.

The Iowa Department of Human Services sent out a request for proposals in Feb. 2015 in an effort to improve the quality of health care, the access to services, and accountability as well as to create a more stable Medicaid budget.

Taylor said he is not seeing that happen.

“The [Governor Terry] Branstad-[Lt. Governor Kim] Reynolds decision to privatize Medicaid is not working,” said Taylor. “The real tragedy here is that Iowans are the ones suffering while picking up the hefty tab [for the privatization].”

Taylor said state and federal tax dollars are being used to offset the $450 million in losses the MCO’s told legislators about a couple months ago. And he said even more money will be coming their way in the coming years.

“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,” said Taylor, adding that more oversight would have been possible if the privatization was not pushed through so quickly.

He said in the meantime, he expects to see legislation come before the Iowa House and Senate that will address smaller issues with the program, not the privatization as a whole.