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Change of Course for Privatized Medicaid in Iowa: For-Profit Company Quits

Department of Human Services Director Jerry Foxhoven
Joyce Russell/IPR
Department of Human Services Director Jerry Foxhoven

Nearly a quarter of a million patients covered by Medicaid, Iowa’s health care program for the poor, disabled, and elderly, are advised to watch the mail for a new insurance card.  

One of the three for-profit companies who have been managing the program since last year is pulling out.  

The Department of Human Services has been negotiating for months with the companies trying to agree on rates and terms for this year.      

They include Amerigroup Iowa, UnitedHealthcare Plan of the River Valley, and AmeriHealth Caritas.   

Talks broke down with AmeriHealth Caritas.   They will no longer be participating in the program.

DHS Director Jerry Foxhoven says he is still committed to for-profit management of Medicaid.  

“It's the right way to both provide good health care services and keep it sustainable in the long term,"  Foxhoven said.   "Just because I have a problem with my iPhone doesn't mean I got back to my rotary land-line.”

The state reached agreement with the other two companies for a 3.3% increase in rates.      That will be retroactive back to July 1st.

AmeriHealth Caritas covered 215,000 Iowans under Medicaid.     They will be automatically reassigned to one of the other two companies.

"Members can see a doctor as they normally would, and they should watch their mail and our website for more details as it becomes available," DHS Deputy Director and Acting Medicaid Director Mikki K. Stier said.

DHS has sent out an RFP to recruit a replacement for AmeriHealth Caritas.   

“We’ll find somebody else to fill in that gap,” Foxhoven said.

Democratic critics of privatization were quick to respond to the news.

“Today’s announcement is more bad news for Iowans needing accessible health care, and it’s more proof that Medicaid privatization is a horrible disaster,” said Senate Minority Leader Janet Petersen (D-Des Moines).     

Copyright 2017 Iowa Public Radio

Joyce Russell is a correspondent based at the Iowa Statehouse. Joyce has been covering the Iowa Statehouse since shortly after joining the news staff at WOI Radio in 1988. Her earlier broadcasting experience included news reporting at commercial stations in Oklahoma City and Fort Wayne, Indiana. Joyce’s reports can be heard on National Public Radio and American Public Media programs including All Things Considered, Morning Edition, and Marketplace. She covered the last six Iowa caucus campaigns and interviewed numerous candidates for president, including some who went on to attain the highest office in the land.