Iowans have fewer numbers to toss around while discussing the effects of privatized Medicaid, but are no closer to answers on the program’s value.
A report released this week by State Auditor Mary Mosiman evaluated three wildly different cost-saving projections issued by the state for the fiscal 2018 — $232 million in January 2017, $47 million in November 2017, and $141 million in May 2018 — and determined the methodology, or formula, behind the most recent estimate was the most accurate. Using that formula, Mosiman provided Iowans a new cost-saving projection through September 2018 of $126 million.
It’s roughly half what the Branstad-Reynolds administration promised when it unilaterally moved Medicaid in April 2016 from a primarily state-run fee-for-service model to privatized managed care. Such disparity shouldn’t be overly concerning, however, because these are all projections. The state hasn’t suddenly experienced a budgetary windfall.
All of the estimates compare costs between the last full year of the state-run fee-for-service program with a full year of privatized managed care. In other words, if the state had not turned its Medicaid program over to private insurance companies, state officials estimate the taxpayer bill would have been even larger. As Mosiman cautions in the report, this isn’t an apples-to-apples comparison, and it will become less meaningful with time.
As for actual savings, there aren’t any. In 2015, the last year of state-run Medicaid, total spending was slightly less than $5 billion. Total spending this year, according to the report, is almost $5.2 billion, and is expected to increase to more than $5.6 billion in 2019.
Per member cost was $9,333 in 2015 and described by state officials as unsustainable. In 2019, according to the report, per member cost will be $9,436.
Most troublesome is that simply researching how estimates are determined doesn’t provide insight into how potential savings are realized. Iowans still don’t have a full understanding, for instance, of how many Medicaid enrollees have been moved from higher-cost home settings to less desirable institutionalized care. Taxpayers don’t have clear numbers showing the length of time Medicaid providers must wait before receiving payment on claims. There has been no attempt to qualify related and increased government expenses under privatized Medicaid, such as the larger burden placed on the state ombudsman, or any related effect on the nonprofit sector.
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Every Iowa household could slash expenses by disconnecting from power and heat. But what are the ramifications? Would it result in more comfort, greater well-being or better health outcomes?
Mosiman’s report shows which formula state officials should use to create estimates. Iowans still are waiting on a report that shows the true value of the growing cost of managed care.
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