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Medicaid Privatization Scrutinized

Joyce Russell/IPR
Legislators, lobbyists, and health care company representatives. They attended a statehouse committee meeting on Medicaid privatization.

A statehouse committee spent the day Tuesday hearing about what’s being called a massive change in how health care in Iowa is delivered to the poor and disabled. 

Private companies are scheduled to take over management of the state-federal health care program known as Medicaid which serves more than 560-thousand Iowans.  

Critics worry about the effect on the state’s most vulnerable populations.  

Information packets are going out to the hundreds of thousands of Medicaid patients in Iowa informing them of the change.    Some have questions.    So do the health care providers including doctors, hospitals, mental health clinics, and home health care aides.    

Medicaid director Mikki Steir says her department has an open door.

“We're answering as many questions no matter where they’re coming from as quickly as we can,” Steir says.

Under privatization, the state will pay for-profit companies a certain amount per patient, instead of paying a fee for services.   

Some providers say they don’t know yet what rates they’ll be paid.   Others say paperwork that the state used to take care of will fall to them.   

Critics like Iowa City  Democrat Joe Bolkcom object to the January 1 launch date.

“This continues to be on a fast track,” Bolkcom says, “an arbitrary time frame to implement this massive change.”

Advocates worry that patients who are already struggling day to day won’t open their information packets and will get lost in the rush. 

Ames Democrat Lisa Heddens describes one patient who went from phone number to phone number looking for   help. 

“We’ve got 565-thousand individuals here who are affected by this change,” Heddens says.  “We’re talking about people here, and whether they can get services.”     

But representatives of the for-profit companies were there to reassure skeptics.    

Karen Michael is with AmeriHealth Caritas Iowa, one of the winning bidders:    

“The very worst thing we can do on January 1st is interrupt care,” Michael says.   “We’re all sensitive to that.”    

Advocates for patients worry about continuity of care.  

The companies say they’ll work with current case managers and phase the program in slowly.      And they say they’ll follow the guideline to use 88% of the money the state pays them for direct care of patients.

Senator Bolkcom offered a motion to delay the program’s implementation until July.   That motion failed on a partisan vote.    

One leading Republican on the committee said a lot of the day’s discussion was partisan.

“I think there’s politics behind this through and through,” says Mount Pleasant Representative David Heaton.   “I think people are trying to hold the governor responsible for what’s being proposed here.”

Cedar Rapids Democrat Liz Mathis said the governor is responsible.

“It was the governor’s plan,” Mathis says.  “It caught us by surprise.   It caught you by surprise.   This was his idea.  It emanated out of his office.”

The committee will meet again next month.  Senator Bolkcom says he’ll try again to get the start date pushed back.  

In the meantime a lawsuit is proceeding.   Companies denied bids are challenging how the state awarded the project.    

Governor Branstad believes he’ll win that fight.

“The attorney general’s office, they feel confident we’ll be successful in that process,” Branstad says, “and the Department of Human Services did all of the things in the appropriate way.”  

Representative Heaton urged calm as plans proceed to launch the program.

“We’re going to have some faith in what's being proposed here,” Heaton says.     

Heaton agrees with the governor that there’s room for efficiencies in the giant Medicaid program, and that patients will get better service when it’s privately run.