Two health insurers already operating in Iowa have indicated they will bid on Iowa's new proposal to outsource its $4.2 billion Medicaid program to managed-care companies. It's the latest state move to privatize the health insurance program for low-income Americans.
The Iowa Department of Human Services recently released a request for proposals, saying it will contract with two to four insurers to manage benefits and care for the state's Medicaid population. The contract also will cover residents with coverage through the state Children's Health Insurance Program and people who qualify for substance-abuse services.
Chris Rigg, an analyst at Susquehanna Financial Group, said in an investor note that he expects most or all Medicaid managed-care companies to bid for the Iowa business.
Bids are due May 8, and preliminary winners are scheduled to be announced around July 31. Iowa officials will negotiate final terms with the winners in August before the contract goes into effect Jan. 1, 2016. The state expects the contracts, which will pay insurers a capitated per-member, per-month amount, will save $51 million in 2016, Iowa Department of Human Services spokeswoman Amy McCoy said.
Iowa is not the only major Medicaid contract in play this year. Georgia is rebidding the Medicaid managed care for its roughly 1.5 million enrollees. Anthem, Centene Corp. and WellCare Health Plans are the incumbents, and Georgia said it could choose up to four insurers.