Editorial: Privatized Medicaid is worst prank ever – DesMoinesRegister.com
Saturday was the first anniversary of Gov. Terry Branstad’s Medicaid privatization experiment. On April 1, 2016, Iowa abandoned state management of the $4 billion health insurance program for more than 500,000 poor Iowans and hired three for-profit insurers to take over.
One year later, the entire ordeal is like an April Fool’s joke with no end.
The joke is on low-income Iowans who have lost access to health services. These include home-bound, disabled people who rely on daily visits from caregivers.
The joke is on numerous health care providers underpaid or not paid by the managed care companies. These include an Iowa nursing home forced to borrow $150,000 while waiting for reimbursements, a mental health facility owed $300,000, and a family planning clinic that finally had no choice but to close its doors. One insurer recently notified patients it may stop covering services at Mercy Health Network, which has more than 200 hospitals and clinics across the state.
The joke is on taxpayers now funding insurers’ administrative costs to the tune of hundreds of millions of dollars annually. Taxpayers will also bankroll the additional $130 million Iowa agreed to pay MCOs in October after they complained about losing money.
And Iowans get a good ribbing every time Branstad says his privatized Medicaid is accompanied by “unprecedented transparency.” There is nothing transparent about any of this. Just the opposite.
Jamie Campbell’s in home care has been more than cut in half since Gov. Branstad’s Medicaid privatization went though.
Insurers refuse to explain why claims are denied and providers are not paid. They will not talk about the specifics of financial reports with the media, and by extension the public. When an Iowa lawmaker recently asked companies if they planned to seek more money this year, their responses included: “We really just don’t discuss these things in public settings” and “We do not play it out in a public arena.”
Translation: We will gladly accept billions in public dollars but we will take a pass on being accountable to the public.
The only meaningful transparency over the past year resulted from news media using Iowa’s Open Records law to obtain internal documents from the Iowa Department of Human Services, which contracts with the private insurers.
The most recent batch of such records reveal the kind of Medicaid antics going on behind closed doors. In February, state leaders signed contract amendments with insurers establishing “risk corridors.” These are intended to financially protect insurers by paying the difference if they spend more for medical care than they collect in revenue. In other words, the government shoulders the losses beyond a certain point.
Take a moment to let that soak in.
Privatizing administration of Medicaid was supposed to provide state budget predictability in Medicaid spending. Iowa pays an agreed-upon amount of money per beneficiary to insurers, which pay for care and assume risk. In less than a year, the state has bailed out insurers and is now positioned to shoulder more financial risk. This defies the very premise of managed care.
Meanwhile, Iowa lawmakers, who appropriate state dollars for Medicaid, didn’t know about this amendment until after it was signed. One didn’t learn of it until a reporter told her. The cost of this one contract change is an estimated $235 million in state and federal money.
What is the governor doing through all this? Packing for a new job with the Trump administration in China and continuing to insist the state will magically save hundreds of millions of dollars from privatization. The savings have never been adequately substantiated and look less and less likely. In fact, one is starting to wonder how much more this mess will cost taxpayers.
Iowa is being taken for a ride by experienced, for-profit insurers that will continue to try to milk every penny they can from government the way they have done in other states. The Branstad administration can refuse to cave to their demands and send them packing.
Connecticut fired its private Medicaid insurers a few years ago after companies refused to share information with the state and an audit found they were being overpaid by nearly $50 million annually. The state transitioned back to the traditional model in which the state pays for health services instead of paying managed care companies. What happened? The cost of care per patient dropped. Administrative expenses dropped. Then number of doctors accepting Medicaid patients increased.
Iowa can return to state-managed Medicaid that worked well for decades. It had lower per-person spending than many other states. It provided reliable reimbursements to providers and consistency in coverage for vulnerable Iowans.
Because privatized Medicaid may be the worst April Fools’ joke in history.
In April 2016 three for-profit companies took over management of Iowa’s Medicaid program. Gov. Terry Branstad says the program is saving the state money but the companies say they are losing money. Critics worry about a loss of services.
Zach Boyden-Holmes/The Register