Letter to the Editor - The MCO Medicaid Mess: Why Iowans Shouldn't Have to Clean it Up

Dear Editor, There's a saying in business: "Where there's mystery, there's margin," meaning complexity, confusion, and a lack of transparency create profit opportunities for those at the top. Sounds a lot like the privatization of Medicaid, and Iowa insiders' plans to fund it. Medicaid alone is complex. The combination of federal and state money pays for healthcare and services for hundreds of thousands of vulnerable Iowans – physically and intellectually disabled kids, veterans, seniors, and low-income families whose employers don't offer insurance. The list goes on. Medicaid members or their caregivers must also untangle a bureaucratic web of requirements. In 2016, the Branstad administration, through executive order, added another layer of complexity by deciding to have private companies – known as Managed Care Organizations, or MCOs - manage Medicaid. It'll save money, they said. It'll improve care, they said. A decade later, we know that's not true. I sounded the alarm in 2021 with a comprehensive review of healthcare outcomes for Medicaid members, comparing the three years before and after privatization. It found a nearly 900% increase in illegal denials of care post-privatization, meaning MCOs told members they couldn't receive the care they were entitled to – care that your tax dollars pay for. The report also outlines violations of federal and state law and failures to comply with the contracts negotiated with the state. We heard horror stories from members, particularly those receiving home-based services, left in their beds, and forced to go without baths and wound care. First and foremost, this is morally and ethically wrong. Companies legally obligated to protect Iowans shouldn't put them at risk. They also shouldn't rip off taxpayers who trust that their money is being used to help their neighbors as intended. This also increases costs for Iowans who don't even use Medicaid. Most medical providers in Iowa will tell you they're spending more time and money just getting MCOs to pay their bills. That time (and sometimes, the salary of a new full-time employee) is something YOU pay. The nonpartisan Legislative Services Agency estimates that the amount the state pays MCOs to manage Medicaid members' cases will increase nearly 90% this fiscal year, from nearly $73 million in FY25 to $135.5 million, even as the number of Iowans enrolled declines by about 6,300. If you break that down, the MCOs will pocket an additional $329 per member this year. Why the state is paying them more to do less is perplexing, especially when lawmakers are scrambling to cover a $91 million Medicaid deficit this year, followed by a $168 million shortfall in FY27. But again, that's a pattern: they doubled payment to Odyssey to run the ESA program while asking for nothing more in return. Lawmakers' plan to bridge the gap would retroactively increase taxes on Health Maintenance Organizations (HMOs), which most Iowans rely on for health insurance. It's no mystery who will end up eating the increase – Iowa taxpayers. Insurance executives estimate a family of four would pay an additional $500 in premiums between now and December. Enough already. With the state's economy ranked the worst in the nation and average personal income growth near the bottom three consecutive years, Iowans have less money in their pockets as it is. Iowa taxpayers shouldn't be expected to clean up another mess created by a decade of politically motivated policies and reckless budgeting practices. They deserve transparency and leaders willing to shine a light on the margins and hold the MCOs accountable. The privatization of Medicaid should be reversed to save Iowans' tax dollars and reduce healthcare costs, while improving the quality of care. Rob Sand Des Moines, IA