DES MOINES — Officials announced Tuesday that nearly 215,000 Medicaid enrollees served by AmeriHealth Caritas Iowa under the state’s privately managed system will be transferred to UnitedHealthcare of the River Valley by the end of this month.
However, officials with the Iowa Department of Human Services said AmeriHealth customers who would rather switch to the Amerigroup Iowa managed care organization instead can do so by Nov. 16 and be eligible for coverage Dec. 1. Otherwise, clients have 90 days — until March 1 — to finalize their choices.
The massive swap is because the state and AmeriHealth failed after weeks of talks to agree on a deal for the company to continue being one of Iowa’s three managed care companies.
Department Director Jerry Foxhoven told members of the Medicaid Assistance Advisory Council that a process to find a replacement for AmeriHealth — the Medicaid insurer with the largest concentration of the state’s special-needs population — is proceeding. But the new insurer won’t be available to Iowans until July 1, 2019.
The developments came to light Tuesday in a sometimes-contentious meeting in which Foxhoven described the transition as a “scramble” that the system will manage but that Sen. Joe Bolkcom, D-Iowa City, called “reckless” in suggesting a delay.
“This is the worst privatization of Medicaid in the country,” Bolkcom said afterward. “ ... This was sold that it was going to be more cost effective and people were going to be healthier. And we’re not seeing either of those things.”
Foxhoven said Iowa’s situation is “not uncommon” given that other states have seen companies withdraw as managers. The state has signed new contracts with Amerigroup Iowa and UnitedHealthcare at an increased of 3.3 percent per-member, per-month.
State officials say the increase will amount to $19.7 million, but Bolkcom said the state share could grow as high as $60 million depending on factors yet to be decided.
The senator pointed to a Legislature Services Agency analysis indicating the state also has agreed to give $54 million in one-time “catch-up” payments from April 1, 2016, through June 30 plus $23 million in costs pushed into fiscal 2019 that total $137 million.
Foxhoven said new rates are well below the 10 percent yearly increases Iowa’s Medicaid program experienced as a fee-for-service system. He said contract talks with AmeriHealth ended after the company sought $150 million more.
Foxhoven said he was confident UnitedHealthcare will be able to absorb the AmeriHealth enrollees, but conceded the transition “is going to be a little bumpy.”
Lori Allen of Ames, a public member of the advisory council, expressed concern there may be areas of the state currently underserved by UnitedHealthcare, as well as providers already struggling that might go out of business or patients receiving a different standard of service.
“This is beyond bumpy,” Allen said. “I just see a train wreck down the road.”
State officials said they have developed a transition plan and will monitor patients as they switch insurers to ensure there is no gap.
All three insurers saw large financial losses — more than $500 million collectively — during their first year of operation. But AmeriHealth by far saw the largest, nearly $300 million.
The insurer also has the biggest share of the state’s special-needs population — with more than 23,300 beneficiaries receiving long-term services and support.
At her weekly news conference Tuesday, Gov. Kim Reynolds commended Foxhoven for his handling of the contract negotiations and the transition plan.
“Our No. 1 priority is to make sure that the members receive continuity of care and that they continue to receive quality of care and very, very minimal disruption,” she said.
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