Let’s go back to February 2016, when Iowa was in the final stages of switching from state-run Medicaid services to privately managed care. A news release attributed a statement to Charles Palmer, director of the Department of Human Services, explaining the purpose of the change: “Modernizing Medicaid will allow Iowa to create incentives for better health outcomes for members through comprehensive health care delivered within budget constraints. … By better managing Medicaid, we will make sure Iowans are getting the right care at the right time and in the right setting.” Palmer and other leaders said they expected to save $51 million in the program’s first six months.
A decade later, Iowa has not delivered on those promises. Medicaid isn’t observing any predictable “budget constraints.” Constant complaints and subsequent adjudications about coverage denials tell us that private companies aren’t hitting the mark for care, timing and setting. Iowans’ stories indicate that, often, “incentives for better health outcomes” have taken the form of revoking permission for effective care plans in seeming hope that Medicaid recipients will magically stop needing that care.
When managed care turned 10 years old this month, state officials offered no notes of celebration for a job well done. But critics marked the April 1 anniversary with a flurry of news releases detailing all that they say has gone wrong since Gov. Terry Branstad pushed through the transformation.
Enough is enough. The best time to call off the managed care experiment and return to having state employees handle claims was any of the previous times (at least nine) this editorial board called for abandoning it. The next best time is now. The new governor Iowa elects in November should announce an unwinding plan on or before his first day in office.
Doing that won’t make heart-rending stories about denied care go away. It wouldn’t solve Iowa’s perennial Medicaid budget crunch; in fact, switching back would surely involve short-term expenses. But it would restore a system that was mostly working for the Iowans in need it was serving. It would improve accountability by removing bureaucratic lawyers between those clients and the government responsible for their care. And experience shows it could put a brake on increasing costs (Connecticut said it saved $4 billion in a decade by going back to state-run Medicaid). Iowa should stop paying managed care companies a premium to deliver unacceptable results.
Managed care troubles are multiplying
Regardless of anything Iowa does or doesn’t do, more trouble is coming for everybody involved with Medicaid ― the lower-income and high-needs Iowans it covers, their families, medical providers, administrators for the insurance program, and the taxpayers who fund Medicaid services. The “One Big Beautiful Bill” act that congressional Republicans approved last year spelled out almost $1 trillion in decreased federal spending on Medicaid. The needs that that money would have met aren’t going away, which means the pressure is on states to pay more or find ways to cut services. Iowa could lose up to $12 billion over a decade, according to a KFF projection.
Even before that change starts to take effect, the state is struggling to cover annual shortfalls in the Medicaid budget.
Medicaid coverage makes routine care, including preventive measures, feasible for the lowest-income Americans. Just as important, it covers costs for people who have intense, and often permanent and around-the-clock, care needs. Those costs would be unmanageable for almost any family. If the public doesn’t pay for these extraordinary services, sick Americans suffer and die. Medicaid is a necessity; any debate should be solely about how to administer it.
Iowans, though, have been riddled for a decades by errors and by demands to change treatment that seem driven by the bottom line. For a story in the Des Moines Sunday Register, Chief Political Reporter Brianne Pfannenstiel spoke to a Council Bluffs mother who won a reprieve after a managed-care company’s threat to slash payments to care for her son who has autism and is nonverbal. Stacy Ring said she wasn’t savoring the good news: “I am under absolutely no deluded belief that this is over. It may be over, possibly for this year for us, but it will probably come back again.” Another couple told Pfannenstiel that a proposed denial for home care and supervision could force them to seek residential treatment for their son — which would cost Iowa Medicaid far more than the home services, to say nothing of the consequences of separating the family.
One decade of hardship is enough
Medicaid managed care in Iowa got off to a rocky start, with a merry-go-round of companies joining and leaving the state network in earlier years. Even as the roster of companies stabilized, horrifying stories of lost and denied coverage have continued. State Auditor Rob Sand issued a report in 2021 that found a nearly 900% increase after managed care took over in the number of denials later found to be unjustified. State officials quibbled with bits of his methodology but couldn’t invalidate the headline finding that backed up years of Iowans’ anecdotes.
Earlier this year, the current Iowa Medicaid director talked to lawmakers about an opportunity to save money by handling pharmacy benefits at the state level instead of through the managed care companies. The editorial board stands by its call for state leaders to examine the results of that project. But the new governor need not wait to announce that Iowa will pull the plug on managed care in an orderly but timely fashion. We have long had all the information we need.
Lucas Grundmeier, on behalf of the Register’s editorial board
This editorial is the opinion of the Des Moines Register’s editorial board: Rachel Stassen-Berger, executive editor; Lucas Grundmeier, opinion editor; and Richard Doak and Rox Laird, editorial board members.
This article originally appeared on Des Moines Register: Privatized Medicaid in Iowa delivers on none of its promises | Opinion
Reporting by The Register’s editorial, Des Moines Register / Des Moines Register
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