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The Scarlet & Black

Opinion: Privatized Medicaid isn’t working, let’s find a different model


By Ivy Schuster

There are two ways to save money in healthcare. The first is by ramping up preventive care an ounce of prevention doesn’t cost nearly as much as a pound of cure. The second way is to cut care that has been deemed necessary. I shouldn’t have to say that it is unethical to profit off of Iowans in this way. But former Governor Terry Branstad proposed a third way. He claimed that privatizing Medicaid would “save money, improve access, and improve quality of care.” He and others who supported privatization were and still are wrong.

In the six years prior to Medicaid being privatized, per-member costs increased an average of 1.5 percent per year. In fiscal year 2017, the first full year of privatization, the increase was marked at 4.4 percent. In fiscal year 2018, we had an additional increase of 6.6 percent. These cost increases were reported by the nonpartisan Legislative Services Agency.

The only way that privatized Medicaid could be saving money is by denying claims that should be covered. The new standard practice is to reject claims multiple times. Many of these denied claims have been wrongfully paid by Medicaid recipients because they had neither the time nor energy to fight a system that was specifically designed not to help them.

On top of privatized Medicaid costing us more money, it has also resulted in massive delays in payments to hospitals, physicians and in-home care providersup to six months. As recently as January of this year, the Iowa Department of Human Services has withheld funding to one of the Managed Care Organizations (MCOs) due to failure to pay claims and other unresolved reporting issues. And for rural hospitals with already strapped budgets, the timing and amount of Medicaid payments for identical services vary greatly.

With the constant shuffle of MCOs, some recipients have changed providers three times since 2018, which has caused an additional variety of instability in care. In some cases, in-home care hours have been cut. In others, individuals who had been provided with care in their home were forced to enter a long-term care facilitya major disruption for those individuals and far more costly to taxpayers. The fact is four years in, we have no proof that privatized Medicaid is either reducing costs or improving care, let alone doing both.

But there is good news. The infrastructure still exists at the state level for much of the Medicaid program. Eligibility for the program continues to be managed by the state, and the Iowa Department of Human Services also reviews claims submitted by the MCOsin some cases, those claims are returned multiple times for corrections. If the majority party is not interested in reversing the privatization decision, let’s provide a hybrid model of both systems. But if the majority party is truly more interested in the health of their constituents than the money in their pockets, the best path forward would be to go back to the old system. It is possible, and I believe it is necessary.

Ivy Schuster is the Democratic candidate for State Senate District 38.

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