Privatization of Medicaid in Iowa


Preparations are under way in Iowa to privatize Medicaid, an insurance program that is a lifeline for people with low incomes and/or disabilities. Medicaid provides health-related coverage for nearly 600,000 people in Iowa — children, senior citizens and people who are blind or have other disabilities. The question we need to ask ourselves: how will the poor and vulnerable fare under privatization?

Rising costs and budget constraints led Gov. Terry Branstad to pursue privatization of Medicaid, a $4.2 billion program in Iowa that receives 55 percent of its funding from the federal government and 45 percent from the state. Of the state’s share, about $1.8 billion comes from the general fund. That represents about 18 percent of the state budget. It’s important to be fiscally responsible with the budget, but we also need to consider an important point. Costs are rising because people who never had health care, a basic human need, are finally able to access it because of the Affordable Care Act.

The governor’s program, called the Medicaid Modernization Initiative, relies on four private companies to serve as Managed Care Organizations (MCOs) for Medicaid participants. The governor and his supporters say the MCOs will improve quality and access, promote accountability for outcomes and create a more predictable and sustainable Medicaid budget. The initiative still requires the federal government’s approval before it can be implemented Jan. 1. How wise is it to orchestrate changes for 600,000 children, women and men before the federal government has even given its OK?

Listening posts and public hearings have been held in recent weeks and months. These hearings include heart-rending testimony from family members worried about what will happen to their loved ones with severe disabilities. Privatization is also a polarizing issue. Earlier this month, the Health Policy Oversight Committee rejected a six-month delay of the Medicaid Modernization Initiative. Some disappointed lawmakers accused Gov. Branstad of rushing through the program without considering the ramifications.


Also weighing in is a nonprofit, nonpartisan organization that engages Iowans in state policy decisions. Iowa Policy Project Executive Director Mike Owen raises two valid questions in a blog posted Nov.3. “Why … would we turn over to private industry a critical part of our public safety net to business interests that operate with a principal purpose of making money? How do we assure that services are provided, that our responsibilities are met, if the people running the operation are not answerable to us?” These questions deserve a response from Gov. Branstad and from the Iowa Department of Human Services.

From a Catholic social teaching perspective, we cannot balance the budget on the backs of the poor. Saving money is not immoral, but it should not be our first priority. Iowa’s Catholic bishops have not weighed in on privatization of Medicaid. But they believe that access to affordable health care is a basic human right.

Our task, as Christians responsible for the least among us, is to ensure that Medicaid recipients have access to the health care they need. We can begin by educating ourselves about Medicaid in Iowa and the privatization plan. Visit the Iowa Department of Human Services’ website on Medicaid Modernization at: Contact your state legislators to learn their position on the issue of Medicaid Modernization and to explain the pros and cons. You can find legislators by visiting the website: or call you state representative or state senator in their local offices in your community.

You can also research the four Managed Care Organizations to understand their roles. Medicaid recipients or their guardians will need to decide which MCO they will be a part of:; AmeriHealth Caritas:; United Healthcare Plan of the River Valley:; and WellCare of Iowa:
Remember, 600,000 Iowans in need, people we know or live with, depend on us to do the right thing.

Barb Arland-Fye

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