Iowa’s Medicaid Mess is All Too Familiar

The state of Kansas privatized Medicaid in 2013, contracting with three managed care organizations (MCOs) to administer the program. In fact, Iowa’s privatization is modeled after Kansas Medicaid, also known as KanCare.

Much like Iowa, things have not gone well with Medicaid privatization in Kansas. And, again like Iowa, promises that the MCOs would save millions of dollars have been called into question. So much so that in April 2017, Kansas legislators directed the state’s independent auditors to find out whether KanCare is working. After reviewing nearly 200 million Medicaid records, the LPA released its report in April 2018.

What the auditors found in Kansas should raise many red flags in Iowa:

  • State payments to the insurers grew from $2.1 billion in 2013 to $3 billion in 2016. “Our model results showed that the implementation of KanCare did not appear to have helped contain Medicaid claims costs,” according to the report.
  • State payments to MCOs were about $400 million more than what the private insurers paid in claims in 2015 and again in 2016. The for-profit companies collected $800 million more in public money over two years than they spent on health care for Kansans.
  • After KanCare was implemented, use of nursing home care increased by 16 percent.
  • There was little to no effect on inpatient care “implying (managed care’s) emphasis on preventative care did not reduce beneficiaries’ time in a hospital,” according to the report.

In Kansas, auditors struggled to evaluate some aspects of privatized Medicaid due to a lack of information and the failure of the state to adequately oversee the MCOs. For example, auditors said they could not evaluate whether there were enough doctors and other medical providers participating because the data insurance companies submitted to the state “had duplicative, missing and outdated provider information.”

Sound familiar? It should, because the same frustrating story of broken promises, misinformation and secrecy has been playing out in Iowa since the state was rushed into Medicaid privatization in 2016. And now Iowa Medicaid is being led by none other than the former head of KanCare, Mike Randol.

Across the country, Medicaid privatization has largely failed in its promises to save taxpayer money, maintain access to care and improve outcomes. But it has delivered lucrative contracts to huge, for-profit companies who protect their margins by delaying and denying care and, when that doesn’t work, demanding more from taxpayers. Anyone who cares about the future of Iowa Medicaid and, more importantly, the 600,000 low-income, elderly and disabled Iowans who depend on the program, should demand a thorough audit of the program.