Merger continues of 3 Iowa departments whose services affects millions

DES MOINES — Over 5,000 state workers. More than $2 billion in state funding, or more than a quarter of the state budget. And millions of Iowans — including those on Medicaid --- impacted by the services offered.

There is much at stake as the state of Iowa continues to cement in state law the merger of three state departments — human services, public health and aging — into one mega-department: the new Iowa Department of Health and Human Services.

That work will continue in the 2023 session of the Iowa Legislature, which begins Monday.

State lawmakers set the legislative process in motion during last year’s session, in which they established a framework for the merger and created new benchmarks for the newly formed department to reach before its official first day on July 1.

More legislation will be required to continue the merger.

Leaders among Republican state lawmakers, who have agenda-setting majorities in both the Iowa House and Senate, indicated they are deferring to Gov. Kim Reynolds, who proposed the merger in 2020, and Kelly Garcia, who directs the former human services and public health departments, and will be director of the new health and human services department.

Reynolds declined to be interviewed for The Gazette’s legislative preview series. Garcia was not made available for an interview after multiple requests. A spokeswoman cited Garcia’s busy schedule.

“I think the governor has the right person there,” said Pat Grassley, the Republican House speaker from New Hartford. “If you’re going to make that transition, Director Garcia is someone that, of any director I’ve ever worked with in that department, she is the most accessible, seems like really has things put together well over there.”

Garcia’s salary is capped by state law at $154,300 but she earns tens of thousands more. Garcia, who directs both the human services and public health departments, was among state directors previously approved by Reynolds for a bonus. Garcia was paid $231,788 in fiscal 2022, state records show.

The human services department employs 5,022 state workers and the public health department another 462, according to a transition report filed by Garcia in September.

State lawmakers in the current state budget appropriated just more than $2 billion collectively to the human services, public health and aging departments. The budgets for the state veterans affairs department and Iowa Veterans Home also were included in that state funding.

Grassley and Jack Whitver, the Republican Senate majority leader from Grimes, said they look forward to any efficiencies that can be created by the merger.

“I’m always supportive of trying to create efficiencies or modernizing state government,” Whitver said. “Some of these (state agencies), the way these are set up, have been set up that way for decades. And the world changes, organizations change, and government should change, too. So (I’m) totally comfortable with trying to create efficiencies or modernize different parts of government.”

Democratic leaders said they will be watching the legislation to ensure Iowans who rely on the services provided by the agencies do not get lost in the shuffle. Among Democrats’ primary concerns is the state’s $6 billion Medicaid program, which served 893,804 Iowans over the past year, according to a recent state report.

The Medicaid program is funded by a combination of state and federal dollars. Iowa contracts with two private health care companies — and a third will join in July — that manage the program.

“We’re going to be watching pretty closely, because at the end of the day, these organizations are designed to help Iowans who are most vulnerable and in critical need,” said Jennifer Konfrst, the leader of the minority party Democrats in the House. “So, are we currently meeting those needs appropriately? I would say probably not. Will merging these departments make it easier for Iowans to access these services? Well, they better, if (Republicans) are going to get any support from us on this.

“So at the end of the day, our biggest concern is, can Iowans who need help get the help they need in a way that doesn’t overburden them, and then in a way that allows them to get back to living a life that is full and whole?”

Zach Wahls, who leads the minority party Democrats in the Iowa Senate, shared Konfrst’s concern and also said he wants to be certain that the state does not lose focus from its public health department, especially on the heels of the COVID-19 pandemic.

“I think the No. 1 concern is obviously making sure that we have a seamless transition for Iowans who depend on things like Medicaid and other state services. That’s not easy, but it’s critically important,” Wahls said. “I think No. 2 is, given how substantial the human service portion is going to be of the newly merged HHS, making sure that we don’t lose sight of the public health mission that is continuing to be front and center.”

Comments: (515) 355-1300, erin.murphy@thegazette.com