Iowa's privatized Medicaid program has asked the federal government to pay up to $225 million in risk-corridor payments to make up for losses experienced by the health insurers that run the year-old managed-care program.
The three insurers that operate the state Medicaid program—Anthem's Amerigroup, AmeriHealth Caritas and UnitedHealthcare—have lost an estimated $450 million since the program began in 2016.
Amy McCoy, a spokeswoman for the Iowa Department of Human Services, says she anticipates the CMS will approve the payments in the “coming weeks.” Risk corridors are commonly used for Medicaid managed-care programs, she said.
State taxpayers will also pay about $10 million after June 2018 to help the program. But by outsourcing its $4.2 billion Medicaid program to managed-care companies, Iowa saved about $110 million, McCoy said.
Still, the program has been controversial. The insurers have complained it is “drastically underfunded,” calling it a “catastrophic experience.” Gov. Terry Branstad, a Republican, defends the program and has said he will work with managed-care companies to determine “what makes the most sense going forward.”
The Iowa Medicaid program serves about 500,000 residents.
More than two-thirds of states, including Iowa, outsource some or all of their Medicaid program to private companies, but the benefits of the practice and its impact on quality and cost of care have been unclear.