When former Governor Terry Branstad privatized the
management of Medicaid in Iowa in 2015, he promised the state would save tens
of millions of dollars. A recent report
from the state’s non-partisan Legislative Services Agency has shown that the
promised savings may not have been realized. The report shows that since FY17,
the first full year of privatization, the per-member cost of Iowa’s Medicaid
program has risen an average of 4.4%—nearly three times more than the previous
six years, where the per-member cost rose an average of 1.5% per year.
Defenders of Iowa’s transition to privately managed Medicaid
claim that these per-member cost figures may be misleading, as previous years’
totals may be inflated because they include payments for services provided in
previous years. Critics of privatization contend that these new numbers are
proof that the transition has not fulfilled its promises of saving money and,
indeed, have increased the cost of Medicaid in the state more than when the
program was managed by state administrators.
The privatization of Medicaid in Iowa has become a significant
issue in the upcoming
gubernatorial and state legislative election. The incumbent, Republican
Gov. Kim Reynolds, has defended her predecessor’s decision to shift to privatized
Medicaid management, and while open to making changes, she says that many
Iowans are pleased with the current program.