Iowa Senate votes to end Medicaid privatization

'It isn't the right plan'

ACA navigator Karen Wielert with Medicaid open enrollment at the Community Health Free Clinic in Cedar Rapids on Monday, October 27, 2014. (Cliff Jette/The Gazette)
ACA navigator Karen Wielert with Medicaid open enrollment at the Community Health Free Clinic in Cedar Rapids on Monday, October 27, 2014. (Cliff Jette/The Gazette)

DES MOINES — The Iowa Senate voted 29-19 Thursday to approve a bill seeking to halt Gov. Terry Branstad’s plan to have private managed care companies deliver Medicaid services to 560,000 Iowans, saying the transition is too rushed and needs refining.

Senate File 2125 won support from 26 Democrats and three GOP senators who cited concerns from constituents and providers that the transition to March 1 implementation has too many unresolved issues and too much uncertainty to move forward as currently structured.

“It isn’t the right plan,” said Senate President Pam Jochum, D-Dubuque, the bill’s floor manager, who called for a “stop” for Medicaid privatization and a “restart” in crafting a new approach that would better meet the needs of Iowa’s most-vulnerable residents.

“At the very least, let’s slow this down,” added Sen. Rich Taylor, D-Mount Pleasant.

Senate File 2125 requires the Iowa Department of Human Services to terminate the contracts signed with each of the three managed care organizations to administer the Iowa high quality health care initiative, also know as Medicaid managed care). The bill also directs the DHS to continue to pursue other initiatives to realign the health care delivery system and provide holistic, integrated, patient-centered care while moving toward “a value-based” model of payment.

Sen. Jason Schultz, R-Schleswig, one of 19 GOP senators to oppose the bill, said changing course now would “betray” Iowans and providers who already have signed onto the new approach and would torpedo a state budget built on managed care savings that majority Democrats approved for the current fiscal year.

“This will have a drastic impact. I ask for leadership to stay the course,” said Schultz, who noted the issue has become “a little game of hot potato” for lawmakers and the governor since federal regulators pushed back implementation by 60 days to give Iowa more time to address readiness concerns.


“Let’s give this a shot,” the Republican senator added, saying he was opposed to S.F. 2125 because “it will set us back, it would turn the train around and take us to the wrong destination.” Sen. Liz Mathis, D-Robins, countered that a vote for the bill was “the right thing to do” for a managed care approach that “is ready to leave the tracks and we can stop that.”

Leaders of the GOP-run Iowa House have indicated they would not be interested in passing a bill that faced “a certain veto” by Branstad, who has noted Medicaid spending would take money from other priorities in the fiscal 2017 state budget if the managed care plan and the $117 million in savings associated with it do not move ahead.

“I don’t have any plan to consider a bill that faces certain veto,” said House Speaker Linda Upmeyer, R-Clear Lake, shortly after the Senate approved the measure. “Isn’t this a point in time that we should all be focused on moving forward?”

Upmeyer said she hoped the focus would be on addressing whatever deficiencies or shortcomings exist in a helpful way rather than just pulling the plug on a program that already has contracted with three private companies to oversee the change to a managed care system.

Sen. Amanda Ragan, D-Mason City, said Iowa has a great history of working together to improve health-care options and services for its citizens. She said that could be the case again if “we slow this down and stop and work together.” However, she added “with this program, it’s not ready.”

Republican Sens. Jake Chapman f Adel, David Johnson of Ocheyedan and Tom Shipley of Nodaway voted with majority Democrats to pass the bill during Thursday’s floor debate.

“I’m going to vote for this bill and I feel good about it,” said Johnson. ““It’s moving too fast. That’s the issue here. We need to put a dagger in this.”

Branstad spokesman Ben Hammes said the administration plans to continue to move forward in securing CMS approval for implementing the transition to Medicaid managed care.


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“Senate Democrats, and now former Gov. Chet Culver, are playing partisan politics with Medicaid and the health of Medicaid patients,” Hammes said in his statement. “The facts cannot be denied: Iowa has more than 20 years experience in managed care. Managed care means more doctors for Medicaid patients. Managed care means better access for those patients to doctors, and managed care means curbing the exponential cost growth associated with Medicaid -- 39 other states can’t be wrong.”

Branstad announced plans to transition the state’s $5 billion Medicaid program over to out-of-state managed-care companies in early 2015. The federal Centers for Medicare and Medicaid Services, which still must approve the plan, delayed the transition from Jan. 1 to March 1 — which is 21 days away.

CMS delayed the move due to readiness concerns, including an inadequate provider network and communication problems between the state and the providers and beneficiaries.



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