Change of Course for Privatized Medicaid in Iowa: For-Profit Company Quits

Oct 31, 2017

Nearly a quarter of a million patients covered by Medicaid, Iowa’s health care program for the poor, disabled, and elderly, are advised to watch the mail for a new insurance card.  

One of the three for-profit companies who have been managing the program since last year is pulling out.  

The Department of Human Services has been negotiating for months with the companies trying to agree on rates and terms for this year.      

We'll find somebody else to fill in that gap. -DHS Dir. Jerry Foxhoven

They include Amerigroup Iowa, UnitedHealthcare Plan of the River Valley, and AmeriHealth Caritas.   

Talks broke down with AmeriHealth Caritas.   They will no longer be participating in the program.

DHS Director Jerry Foxhoven says he is still committed to for-profit management of Medicaid.  

“It's the right way to both provide good health care services and keep it sustainable in the long term,"  Foxhoven said.   "Just because I have a problem with my iPhone doesn't mean I got back to my rotary land-line.”

The state reached agreement with the other two companies for a 3.3% increase in rates.      That will be retroactive back to July 1st.

Members can see a doctor as they normally would. -Medicaid Dir. Mikki Stier

AmeriHealth Caritas covered 215,000 Iowans under Medicaid.     They will be automatically reassigned to one of the other two companies.

"Members can see a doctor as they normally would, and they should watch their mail and our website for more details as it becomes available," DHS Deputy Director and Acting Medicaid Director Mikki K. Stier said.

DHS has sent out an RFP to recruit a replacement for AmeriHealth Caritas.   

“We’ll find somebody else to fill in that gap,” Foxhoven said.

Democratic critics of privatization were quick to respond to the news.

“Today’s announcement is more bad news for Iowans needing accessible health care, and it’s more proof that Medicaid privatization is a horrible disaster,” said Senate Minority Leader Janet Petersen (D-Des Moines).