Health

What we know so far about the changes to Iowa's Medicaid managed-care program

Department of Human Services Director Jerry Foxhoven at a news conference regarding UnitedHealthcare’s exit from Iowa’s Medicaid program on April 1, 2019. (Rod Boshart/The Gazette)
Department of Human Services Director Jerry Foxhoven at a news conference regarding UnitedHealthcare’s exit from Iowa’s Medicaid program on April 1, 2019. (Rod Boshart/The Gazette)

More than 600,000 poor and disabled individuals in Iowa rely on Medicaid. But the announcement on March 29 from UnitedHealthcare of the River Valley leaves more questions than answers at this time for many Iowans.

Here’s a look at what is known so far:

What happened?

On Friday, March 29, the Governor’s Office and the Iowa Department of Human Services announced UnitedHealthcare was departing from Iowa’s $5 billion privatized program.

UnitedHealthcare is a managed-care organization that administers health insurance for more than 425,000 poor and disabled Iowans, or about two-thirds of those on Medicaid.

When will it exit the state?

According to a letter sent to the state, UnitedHealthcare plans to withdraw June 30. State officials have not confirmed this date.

What does this mean for my Medicaid coverage?

If you are a UnitedHealthcare member, you will have to switch MCOs.

Gov. Kim Reynolds told reporters Wednesday that the remaining insurers — Amerigroup and Iowa Total Care — will be in a position to absorb the 425,000 members under UnitedHealthcare.

Members will receive notices that they will be reassigned and will have 90 days to decide if they want to go with a different insurance company.

In the meantime, UnitedHealthcare members can continue to see their current health care providers.

What happens next?

State officials and UnitedHealthcare executives have said their priority is to ensure a smooth transition for UnitedHealthcare members switching MCOs.

Why is UnitedHealthcare leaving Iowa?

In her announcement, Gov. Reynolds said she ended negotiations with UnitedHealthcare because of “unreasonable and unsustainable” demands from the insurer. According to state officials, UnitedHealthcare executives requested a waiver on financial penalties imposed on them for not meeting certain performance measures required by the state.

UnitedHealthcare pushed back, saying it has lost $250 million since joining Iowa’s privatized system, and was projected to lose an additional $150 million this fiscal year.

ARTICLE CONTINUES BELOW ADVERTISEMENT

UnitedHealthcare was paid $2 billion in state and federal dollars last year as an MCO, according to Iowa Medicaid Enterprises.

Hasn’t this happened before?

Yes. In November 2017, AmeriHealth Caritas of Iowa withdrew from the Medicaid managed-care program.

Before its exit, AmeriHealth reported a loss of $133 million in the first year of operation, according to Iowa Insurance Division financial disclosures.

The Gazette Des Moines Bureau reporter Rod Boshart contributed to this article.

Check back on this story as updates become available.

• Comments: (319) 368-8536; michaela.ramm@thegazette.com

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.