After Privatization, Iowa’s Medicaid Cost Has Nearly Tripled Per Member

Iowa Gov. Kim Reynolds.Screengrab/CBS This Morning/YouTube

Prior to privatization, the average per-member cost rose about 1.5% each year; afterward, it rose an average of 4.4%.

Privatizing Medicaid was supposed to help keep healthcare costs in check in Iowa, but recently released state figures show that the average cost of insuring an Iowan on Medicaid nearly tripled after private companies took over the program’s management.

From The Des Moines Register:

> Since fiscal 2017, the first full year of privatization, the per-member cost of Iowa's Medicaid program has risen an average of 4.4 percent per year, according to the non-partisan Legislative Services Agency. In the previous six years, the per-member cost rose an average of 1.5 percent per year, the agency said.

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> The new cost figures come amid continuing controversyover whether Iowa should have hired private companies to run the $5 billion program. The shift’s supporters said it would slow growth in health care spending on the more than 600,000 poor or disabled Iowans covered by Medicaid.

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> The Legislative Services Agency compiled the new cost increase figures from past budget reports published by the Department of Human Services, which oversees Medicaid.

Republican Governor Kim Reynolds said Wednesday she still believes privatizing Medicaid was the right decision, in spite of the spike in costs, which the Department of Health and Human Services said was due to bills incurred in previous years being paid in the current year.

> Reynolds’ Republican predecessor, Gov. Terry Branstad, ordered the shift to private Medicaid management in 2015.

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> “Iowans need to be confident that I, as the governor, am going to make sure we have a sustainable program in place that can take care of their loved ones,” Reynolds said. She added that many Iowans are pleased with the services they are receiving under the current Medicaid system.

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> Reynolds said that doesn't mean she's satisfied with the way everything in Medicaid is going. She vowed to continue talking to Medicaid members, families, service providers the managed-care companies and outside experts.

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> "We'll find out where the pain points are and what we need to do differently," she said. "That's what I'm focused on."

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Comments (2)
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alanbard
alanbard

From the article: "Prior to privatization, the average per-member cost rose about 1.5% each year; afterward, it rose an average of 4.4%."

it was privatized in 2017 a 4.4% increase per year has not tripled the cost...

the yearly increase has tripled.... and even that would need to be vetted against inflationary factors to be a valid comparison

we can even be liberal and understand Math... and how to write headlines that are accurate. So was the headline created as clickbait or just carelessness...

nickdude
nickdude

Good point. I was slow to realize that common trick being played here. I mean a tripling of the rate of increase is significant enough for investigation without add the hyperbole for consumption by the peanut gallery.