Des Moines Register Editorial Board: Iowa Can Do Medicaid Better

DES MOINES, IA – A recent editorial from the Des Moines Register’s Editorial Board said out loud what a lot of Iowans have been feeling for years: Iowa’s privatized Medicaid system isn’t working. In a recent meeting with state lawmakers, Iowa Medicaid director Lee Grossman projected the state could save tens of millions of dollars annually by bringing Medicaid pharmacy benefits back under state control instead of handing them off to for-profit managed care companies.

With the state facing a looming $1.2 billion budget hole, those savings are more important than ever. But this isn’t just about money — it’s about the real harm this system has caused for everyday Iowans. In 2020, as State Auditor, Rob Sand audited Iowa’s privatized Medicaid system and found a nearly 900% increase in illegal denials of care after privatization. After nearly a decade of privatization, Iowa families have been stuck battling red tape and bureaucratic headaches that never should have existed, while providers hire extra staff to chase down payments and hospitals take out loans to cover unpaid bills — all adding up to worse care and higher costs for everyone.

As the Register argues, it’s time for Iowa’s leaders to rethink managed care altogether. Rob Sand has been clear that he will begin the steps to reverse the disastrous decision to privatize Medicaid on day one as governor to expand access and bring down costs so more Iowans can get the care they need — when and where they need it.

Read more from the Des Moines Register HERE, or key quotes below:

Lee Grossman, Medicaid director for the state of Iowa:“We’re projecting saving $27.5 million in pharmacy without impacting what (benefits) we’re paying. And what we’re proposing here is to transition pharmacy benefits currently that are being provided within the managed care arrangement that we have with our three MCOs to administering that from the state agency. So, it’s a significant change in terms of how we administer the Medicaid program.”
“[A decade of privatized Medicaid has brought] relentless confusion about whether the switch to managed care actually delivered the promised savings for taxpayers, regardless of any change in the quality of care. A couple of years after the change, the nonpartisan state Legislative Services Agency found that the average cost for insuring an Iowan on Medicaid had been growing by 4.4% annually, compared with 1.5% annually under state management.”
“Whoever takes over as governor in January ― ought to start asking a lot of questions about whether that approach truly can’t be replicated or adapted for other aspects of Medicaid. From the beginning, it’s never been explained why it was OK to let managed care companies use over twice as large a portion of the Medicaid budget for administrative costs than state-run Medicaid programs do.”