Managed where? A brief history of privatized Medicaid

For about 12 years, I was a Medicaid recipient in the state of Iowa. The program was a godsend; I was a teen mother and one of my children suffered petit mal seizures from birth. There were EKGs and sleep studies, and test runs on medication options in addition to the normal well child exams. For the most part, we were able to go to the doctor and get medications that we needed. They did have an obnoxious policy that required me to use a specific allergy medication every year — a medication that my medical provider and I knew didn’t work for me — for a month. By the end of the month, if it didn’t work, (again) I could revisit the doctor and request the proper medication … but the end of that month was also close to the end of the allergy season for the year. By that time, I had no interest in taking more unpaid time off work to make another doctor’s appointment and ask for a medication I wouldn’t need for 11 months. In this way, they were able to minimize cost by reducing my access to the more expensive drug, even though it meant I wouldn’t actually receive effective care.

In 2015, former Gov. Terry Branstad announced he planned to privatize Iowa Medicaid, offering stewardship over the well-being of the impoverished and vulnerable to for-profit insurance companies (Managed Care Organizations). The stated purpose was cost reduction. By creating competition in the market, theoretically the companies would find innovative ways to reduce cost while increasing the quality and effectiveness of medical care. Fifteen months after Branstad announced privatization, these new entrants to the market took over.

In the years since, it would seem that the cost-saving tactics employed by the Managed Care Organizations have been less medical innovation and more a creative re-imagining of ways to reduce access to care. My allergy medication example, although obnoxious, is relatively harmless — but many of the Medicaid recipients being denied care under privatization were older adults and people with disabilities going without services like in-home bathing and wound care.

State Auditor Rob Sand released a report in 2021 detailing an 891% increase in cases where a judge determined that a Medicaid patient’s services had been unlawfully denied following the shift to privatization.

Despite these cost saving measures, two of the original Managed Care Organizations — United HealthCare and AmeriHealth Caritas — jumped ship within the first four years, citing “hundreds of millions” in losses. When Molina Healthcare was awarded a Managed Care contract in June of this year, a civil petition was filed alleging conflict of interest as new Molina CEO Jennifer Vermeer had worked closely with the most senior member of the bid evaluation team as Medicaid Director for the State of Iowa.

Iowa has dis-enrolled about 120,000 people from the Medicaid program this year, in alignment with the stated plan to remove COVID-related protections that ensured continued coverage for individuals determined eligible during the pandemic. However, rather than those participants being deemed ineligible, over 95,000 of the disenrollments were procedural — meaning DHS hadn’t received physical recertification paperwork in a timely fashion. There are myriad reasons an individual experiencing socio-economic status low enough to qualify for Medicaid may not return paperwork expediently, including but not limited to: periods of homelessness, a misprinted address, a hospitalization, mental health issues, disability requiring assistance to complete paperwork, and human error on the part of the requesting body.

When I was a single mother with a family who relied on Medicaid, on occasion the required recertification paperwork I mailed to the Department of Human Services would become misplaced. Each time, I would receive notice that our health insurance was going to be canceled until I reapplied completely and attended an appointment with a DHS worker a month in the future. Effectively, I experienced a procedural disenrollment. In those months, the fear of running out of medicine and watching my toddler succumb to the convulsions of daily epileptic seizures was overwhelming. I could not afford to purchase the medicine out of pocket without sacrificing somewhere else in the budget. Do I pay Alliant this month, or CVS? Do I buy diapers or medicine?

These are the choices people who rely on Medicaid are forced to make when they are denied services, dis-enrolled, or otherwise excluded from care. Service organizations are already reporting increased demand at food pantries during a time when high inflation and rising interest rates have decreased the donor support that nonprofits depend on.

A critical element of leadership is the ability to identify missteps and chart the best new path forward. If we are to be judged by how we care for those most in need, it’s time to acknowledge that there is, in fact, a problem and get to work solving it.

Sofia DeMartino is a Gazette editorial fellow. sofia.demartino@the gazette.com