Department of Human Services seeks $124 million state increase in fiscal 2017

DES MOINES - The Iowa Council on Human Services voted unanimously Wednesday to approve a $1.873 billion request that would boost state funding for social service programs by 7.1 percent in the 2017 fiscal year that begins next July 1.

Chuck Palmer, director of the state Department of Human Services, said the 7.1 percent increase his agency will need is on top of the current $1.749 billion state general fund budget will be needed to serve the 982,546 Iowa who rely on the agency's core programs and services and accommodate reforms that redesigned mental health delivery and expanded health care access.

The proposed $1.873 billion in state general spending that will comprise about 30 percent of the agency's overall $6 billion budget from all federal, state and other outside sources and represents the second-largest appropriation request that will be submitted to Gov. Terry Branstad for 2017.

'We do have a challenging budget,” said Palmer, who noted there likely will be adjustments to the DHS numbers throughout the current and upcoming fiscal years given the number of 'unknowns” that face his agency in moving to the new Iowa Health Link initiative that enrolls Medicaid recipients in a single system operated by private managed care organizations to promote care delivery and establish accountability in coordinating health care.

'We're in the middle of an important transition,” Palmer told the council members, who approved the department's budget recommendations on a 6-0 vote. 'The unknown is very scary for people, we're aware of that.” DHS staff is working to train providers and keep Iowans informed of the impending changes, which he noted are on 'a very fast track, there's no doubt about that.”

Nearly $5.2 billion in state, federal and other financial sources is spent on government health programs, or about 86 cents of every dollar, said DHS budget director Jean Slaybaugh. The largest single subset of the fiscal 2017 budget proposal is the state's share of the Medicaid program - a $1.396 billion request that represents a $110.64 million increase even after the $51.3 million in savings that the state projects in the first six months of switching to a privately run managed care system to deliver Medicaid services to 725,000 adults and children beginning Jan. 1.

DHS officials also project the current state budget will have a projected shortfall of over $41 million in unmet needs and other one-time changes of at least $30 million that will affect the fiscal 2017 ledger.