Iowa’s Medicaid MCOs Get Another Big Raise

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The Medicaid mess that Terry Branstad created and then walked away from just got much, much worse for the end user in Iowa Friday. That end user is of course the 680,000 Iowans who rely on Medicaid for their health needs.

In announcing this huge increase the state did not say where its portion of the funds – some $103 million – would come from. 

I will speculate here and guess that these funds will come from the overall Medicaid funds themselves. Thus the Medicaid user care will be cut and the reimbursements to providers will likely be cut also. This is only speculation on my part. Considering the state hasn’t been able to pay its bills for two years and then enacted a huge tax cut for the wealthy that will drastically cut revenues, you can bet the money won’t come from general funds.

Some excerpts from the Des Moines Register Saturday morning:

“Overall, the new contracts will give the two companies raises of 8.4 percent in state and federal money, totaling $344 million.

Critics say the shift has led to cuts in services and loads of red tape. Supporters, including Republican Gov. Kim Reynolds, say it is leading to more efficient, effective care, and is saving taxpayers millions of dollars compared to what they would have otherwise spent.

Democratic legislators, who have criticized Medicaid privatization, slammed the agreement to pay the Medicaid management companies so much more. “Where are we going to get the money?” said Sen. Liz Mathis, a Hiawatha Democrat. “It’s going to take more than shaking the couch cushions to come up with that.”

Fred Hubbell, the Democratic candidate for governor, ripped the new agreements: “Iowa taxpayers are paying hundreds of millions more than promised, tens of thousands of Iowans have had their services denied or reduced, and providers across the state are being forced to close because of delays and denials in payment.”

State Senator Joe Bolkcom of Iowa City posted this statement on his facebook page:  

“The Reynold’s GOP Medicaid privatization scheme was sold to Iowans from day one as a program that would make people healthier and save money. Neither have happened.

Governor Reynolds has now agreed to fork more than $300 million to pad the bottom line of these massive out of state insurance companies. From day one we knew that this day would arrive. This is how these insurance companies have gamed the system in every state they operate in.

How much longer are we going to be suckers to this failed scheme? The November election will be the first opportunity for Iowans to voice their opinions since the decision was made by Branstad-Reynolds administration to turn a working health care system over to Wall Street companies.”

As far as I know there has been no real audit of the this privatized system to demonstrate any savings or any improvement in services. Branstad promised savings in the $250 million range, but it looks like we will be paying $1 billion to try to get that. That doesn’t make any sense. 

One last snippet from the Des Moines Register:

“The official estimate of savings to the state budget has seesawed. Former Gov. Terry Branstad initially estimated those annual savings would hit $232 million for last fiscal year. By last fall, the estimate had fallen 80 percent, to $47 million. Then the estimate jumped again, to $140.9 million in May.”

Note that these are only estimates and not actual audits. Still far below even the payments for the MCOs.

We do have a Medicaid recipient in our family. Our experience tells us that the state did a much better job  of running the system. While The Reynolds administration has sought to tie the state up in contractual obligations, we feel the best thing for the state of Iowa would be to bring the administration of program back in house. This would return money now being used for overhead to be returned to patient care.

Fred Hubbell and the Democratic state House and state Senate candidates will reset the Medicaid program back to a program that works for the end user.

And when Kim Reynolds tells you that privatized Medicaid is running well, she is either lying or a fool. Neither of those are good qualities for a Governor. 

About Dave Bradley

retired in West Liberty
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