Ragan Report

As predicted, private Medicaid is a disaster for Iowa
     The decision to privatize Medicaid is not working.
     In February, the three private managed care companies told legislators that they’re losing $450 million. Subsequently, the Branstad-Reynolds Administration signed contract amendments with all three companies agreeing (after a certain point) for the state to take on more costs, while the managed care companies continue making a profit. This is completely contrary to the premise of privatizing Medicaid, which is supposed to move the risk to the insurance companies and bring stability to the state budget.
     The revised Medicaid privatization plan will allow an additional $235 million in taxpayer money to go to the out-of-state, for-profit companies. This is on top of the $130 million they received from the Branstad-Reynolds Administration in October. In one year, Iowa taxpayers have coughed up more than $365 million above what was agreed to, in support of corporations that are not providing promised health care to Iowans. All of this has been done without consulting the Legislature.
     Iowa had one of the best-run Medicaid programs in the country. Many innovative, cost-effective strategies were just getting off the ground when Branstad-Reynolds unilaterally decided to privatize the program. Legislative Democrats said all along that privatized managed care was not right for Iowa, especially for people with disabilities and other long-term needs.
     The only way to reduce costs and make a profit for the private companies is to deny, delay and drastically reduce services, and the amount paid for them. The real tragedy here is that Iowans are the ones suffering, while picking up a hefty price tag.
     Sen. Amanda Ragan (D-Mason City) serves Franklin, Butler and Cerro Gordo counties in Senate District 27. She can be reached at (515) 281-3371 or (641) 424-0874. Email her at amanda.ragan@legis.iowa.gov.