Agency projects $14.5 million Medicaid shortfall

An Iowa Legislative Services Agency report released Wednesday estimates Iowa's Medicaid program needs a $14.5 million budget boost still this fiscal year.

And for the next budget year that begins July 1, the shortfall would grow to $109 million, the agency forecasts.

However, Gov. Terry Branstad expressed confidence that any losses in the state's program - along with concerns from the three private insurers handling Iowa's managed care - could be ironed out.

'We've been working with them (the insurers) on a collaborative basis, and we anticipated that there would be some losses as they have had in other states,” Branstad said Wednesday during a budget hearing. 'And I've talked with them individually on this, so we feel very confident that we're going to be able to sustain the savings that we anticipated when we put the budget together ...

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The governor said he would not offer additional higher rates for the insurers. The managed-care organizations were offered about $33 million in increased capitation rates - per-member, per-month fees - in November.

'There's no additional money, and you know how tight this budget is,” Branstad said.

The LSA report's estimated loss for this fiscal year takes into account a plus of $22.9 million carried forward from last year. But it also records the $33 million rate increase offered to the MCOs in November.

For fiscal year 2018, the Department of Human Services and the Department of Management - usual participants in the overall forecasting group - did not provide estimates for increases in capitation rates for the MCOs, the report said.

U.S. Rep. Dave Loebsack, D-Iowa City, called for the federal Centers for Medicare and Medicaid Services to yank Iowa's waiver to privatize Medicaid.

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This plan was implemented too quickly and is grossly underfunded,” Loebsack said in a statement.

State Sen. Liz Mathis, D-Robins, a longtime opponent of the state's rollout of managed care, said in a statement that 'Gov. Branstad, Lt. Gov. (Kim) Reynolds and the Legislature must make fixing the Medicaid mess a top priority for the 2017 session.”

The program's design and implementation have caused 'Iowa's taxpayers (to) face millions in increased expenditures, and the health and safety of one in six Iowans is at risk,” she said.

Rod Boshart of The Gazette's Des Moines Bureau contributed to this report.