EDITORIALS ELSEWHERE

EDITORIALS ELSEWHERE

Recent editorials published in Iowa newspapers courtesy of The Associated Press.

Who can save $50 million in Medicaid?

State employees

What does a government agency do with an announcement it doesn’t really want anyone to hear? It issues the press release on Friday afternoon when everyone is headed home for the weekend. Last Friday afternoon the Iowa Department of Human Services announced it had signed contracts with four managed care companies to administer Iowa’s $4.2 billion Medicaid program.

The two-year contracts were signed even though the federal government, which provides the majority of the funding for Medicaid, has not approved Gov. Terry Branstad’s privatization plan. Most Iowans do not support this move.

Thousands of health providers and more than 500,000 Iowans have no idea what will happen on Jan. 1, when these companies are supposed to take over.

The state, however, plans to pay four insurers a set amount of money for Medicaid patients. In exchange, the company becomes responsible for “managing” those patients’ care. This may make the state’s Medicaid budget more predictable going forward, but what if insurers decide the state isn’t paying enough?

Perhaps they will demand more money, as insurers in Florida did after reporting losing hundreds of millions of dollars through statewide privatization. Perhaps they will cut reimbursement rates to providers and eventually benefits for patients. They could impose hurdles and hoops for patients to jump through to secure care. And there’s always the tried and true method of denying claims. While private insurers excel at finding ways to reduce spending on health services, no one knows exactly what all this may mean for Iowans down the road.

What we do know: These companies will do just fine. More than fine. The contracts appear to allow them to spend up to 12 percent of public dollars on administration. That is three times what state-managed Medicaid currently spends, and it’s in addition to anything spent on state administration. These hundreds of millions of dollars will not be used to pay Iowa doctors, pharmacies and hospitals. Instead the public money will be used to help already profitable companies become even more profitable. It will pay salaries for insurance company workers who have never checked a patient’s blood pressure, performed a surgery or changed a bedpan.

Taxpayer money intended to be spent on health care will ensure the wealthiest insurance executives become even wealthier. The CEO of UnitedHealth Group, Inc., for example, raked in $66 million in total compensation in 2014 — 500 times the annual salary for Iowa’s Medicaid director.

Yet Iowans are supposed to believe one unsubstantiated, sketchy DHS estimate that privatization will magically and almost immediately save taxpayers $51 million. What the Branstad administration is not talking about: State-managed Medicaid saved nearly $47 million last year “through program integrity cost avoidance or recoveries while maintaining essential healthcare services and provider rates,” according to a recent report from DHS.

A few dozen state employees — who do not earn multi-million- dollar salaries and are not beholden to stockholders — accomplished this. Not huge, for-profit insurers.

— The Des Moines Register. Oct. 16

What the Branstad administration is not talking about: State-managed Medicaid saved nearly $47 million last year