Iowa Senate approves $1.9 billion human services budget

DES MOINES - Majority Senate Democrats voted Wednesday to boost state funding for state health and human service programs to $1.9 billion next fiscal year, including money to keep open mental health institutes in Clarinda and Mount Pleasant and maintaining current code language on abortion services that are eligible for Medicaid reimbursement.

Senate File 505, which cleared the Senate on a 26-22 party-line vote, also seeks to establish a legislative oversight commission to oversee a shift to a Medicaid managed care system operated by private companies and to cap profits by limiting administrative costs paid to managed care companies and barring them from saving money by reducing provider rates or reducing the number of Medicaid waiver slots. The bill goes to the Iowa House, where majority Republicans have a fiscal 2016 spending target about $100 million below the Senate level.

'This bill does a lot of great things,” said Sen. Amanda Ragan, D-Mason City, co-leader of the health & human services budget subcommittee and S.F. 505 floor manager. 'This bill spends $26 million less than the governor proposed on programs in the departments of human services, public health, aging, veterans' affairs, Veterans Home, and the long-term care ombudsman.”

The $1.904 billion that would be appropriated from the state's general fund for fiscal 2016 would be an increase of $45.8 million, or 2.5 percent, over current funding with most of the new money committed to initiatives already established. The bill also contains $451 million from non-general fund sources - a $16.8 million hike over fiscal 2015.

The Senate budget plan anticipates more savings from Gov. Terry Branstad's plan to move to a Medicaid program managed by private health care provider by capping and reducing provider profits while insisting on quality services as part of the shift.

Democrats also build in about $13 million from federal block grant and Medicaid sources to keep mental health institutes in Clarinda and Mount Pleasant operating beyond July 1 and direct $32 million from state's ending balance to address a projected Medicaid shortfall for the current fiscal year.

Sen. Jake Chapman, R-Adel, challenged whether the federal sources designated to fund the MHIs were reliable or could be used for the designated purposes and he challenged majority Democrats' premise that they are spending at or below the governor in a number of areas of the $7.341 billion budget proposal.

'I continue to hear that these are the governor's budgets. These are not the governor's budgets. I know the governor, I've seen the governor's budgets, these are not the governor's budgets,” Chapman said.

The bill increases Medicaid funding by $96.6 million to $1.346 billion, which included a projected reduction of $108.3 million due to cost containment strategies such as transitioning the system to managed care. Other increases were $32.5 million for nursing home, $6.4 million for hospital rate and $3.9 million for home health rate 'rebating,” $4.2 million to provide a 1.5 percent rate increase for home and community based services, and $9.5 million to the child care assistance program.

Branstad spokesman Jimmy Centers said the governor is pleased that his Medicaid modernization initiative for Iowa patients appears to have bipartisan support.

'The reasonable savings included in Gov. Branstad's budget are based on actuary calculations, empowering Iowa's partner plans to improve the quality of health care outcomes for Medicaid patients while giving Iowa taxpayers predictability and sustainability in the budget,” Centers noted.

'Gov. Branstad is committed to partnering with modern plans working to find savings by improving the quality of access, care, and outcomes for Medicaid patients,” he added.

During Wednesday's floor debate, Republican senators tried unsuccessfully to amend the bill to require drug testing for recipients of public assistance under DHS' family investment program (FIP) and for state legislators to participate in the state's health insurance program, verify assets for people seeking public assistance, and better document that a recipient of public aid is a U.S. citizens or a qualified alien authorized to be in this country.

In prepared remarks that Ragan omitted during her floor speech, she said she agrees with Branstad on abortion services that should be eligible for Medicaid reimbursement, and that Democrats 'borrowed his language for our bill.”

'As noted in the bill, there are only four conditions under which an abortion expense can be covered: instances of rape, incest, of severe fetal abnormality, and when the life of the mother is at risk. Additionally, the bill requires a doctor performing an abortion inform the patient that an ultrasound may be performed and the results viewed before the procedure. In short, the bill narrowly defines the abortion services eligible for Medicaid reimbursement while respecting a woman's deeply personal decision,” according to prepared remarks that Ragan said she did not include in her floor remarks to shorten her speech and avoid a confrontational tone.

In other budget action Wednesday, senators voted along party lines to approve bills funding higher education, state courts, economic development, agriculture/natural resources, and state administrative and regulatory functions. Senate Democrats called up a House-passed higher education funding measure that would commit $977.6 million in general fund appropriations to Iowa's regent universities and special schools, community colleges, workforce training efforts, private college tuition grants and other programs and amended it with their target of $1.026 billion that would increase funding by nearly $40 million next fiscal year.