Iowa's controversial privatized Medicaid program is facing intense scrutiny and financial concerns from the health insurers that run it, the Des Moines Register has reported.
A series of documents obtained by the Des Moines Register reveal that the insurers have said Iowa's Medicaid managed-care program is “drastically underfunded” and likened it to a “catastrophic experience.” The three insurers that operate the state Medicaid program are Anthem's Amerigroup, AmeriHealth Caritas and UnitedHealthcare.
The Iowa Department of Human Services announced in 2015 plans to outsource its $4.2 billion Medicaid program to managed-care companies. The program went into effect this year and it is expected to save the state $110 million in taxpayer dollars at the end of fiscal 2016 in June.
In recent memos and emails, the insurers express to state officials that the program isn't financially sustainable and the reimbursement rates that have been set are deeply flawed.
The state updated capitation rates in October to better reflect emerging trends, particularly drug ingredient costs, said Amy McCoy, a spokeswoman for the Iowa Department of Human Services, in a prepared statement.
The insurers have also reported millions of dollars in losses since the program went into effect. The Des Moines Register reported the state has offered the companies an extra $127.7 million in state and federal funds for the program but one insurer executive said it “is not acceptable.”
“We do not anticipate any updates to the program that will require the expenditure of additional funds this fiscal year,” McCoy said.
In a prepared statement, a UnitedHealthcare spokesman said, “Sustainability is critical to the long-term health of both Iowa's Health Link program and the many people it serves, and we continue to work with the state to ensure the program is appropriately funded.”
Requests for comment from Amerigroup and AmeriHealth Caritas were not successful Tuesday.
Both Iowa Gov. Terry Branstad, a Republican, and the Iowa Department of Human Services have maintained the program is still expected to save the state millions. “Bottom line, the Medicaid program is still on pace to save Iowa taxpayers $110 million while providing more services and healthier outcomes,” McCoy said.
McCoy also said, “(The Department of Human Services) is committed to an actuarially sound and sustainable program with partners who are using better health management to help our members live healthier lives and curb the rising cost of the Medicaid program.”
The Iowa Medicaid program serves about 600,000 residents.
Iowa is one of many states that has contracted some or all of its Medicaid managed-care programs. More than two-thirds of states contract out some or all of their Medicaid program to private companies. The benefits of the practice and its impact on quality and cost of care have been unclear, however.