Back in 2013, Gov. Terry Branstad signed a bipartisan deal to expand Iowa’s Medicaid program while praising the “cooperative environment” that fostered the compromise. It was a major health care achievement, one he touted as he ran for a sixth term in 2014.
But just months after securing that new term, Branstad’s administration announced it would be turning over management of Medicaid to private companies. The governor made this drastic change in a health care program serving 550,000 Iowans without consulting state lawmakers or health care stakeholders. The “cooperative environment” the governor praised disappeared. It was replaced by yet another unilateral Branstad edict, one that he somehow failed to mention to Iowans on the campaign trail.
Iowa’s Medicaid program has a reputation for low administrative costs and skillful management. Administration officials point to rising Medicaid costs, even though its costs have risen more slowly than the price of employment-based private insurance. In 2012, health care groups and lawmakers embarked on improvements to the system aimed at further cost reductions, including the creation of Accountable Care Organizations designed to improve outcomes for patients, especially chronically ill Iowans who account for much of Medicaid spending.
Instead of following through on those Iowa solutions to make Medicaid better, Branstad has chosen privatization. Last month, the administration selected four companies to run the $4.2 billion program.
We agree with critics such as the Iowa Hospital Association, which argues that private managed care likely will result in higher administrative costs in the pockets of private firms while access to care is reduced and payments to providers are squeezed. Branstad has promised cost savings, but has provided no details on how those savings would be achieved. Three companies passed over by the administration now are raising legal red flags about the process.
The good news is the Federal Centers for Medicare and Medicaid Services must still sign off on Branstad’s plan. We urge the CMS to reject this ill-conceived, poorly-executed privatization push. Branstad should, instead, bring together lawmakers, providers and others to find ways to improve Medicaid and hold down costs. It’s time to revive that cooperative environment.
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