Iowa will soon have three health insurance companies to help run its Medicaid program.
On Wednesday, the Iowa Department of Health and Human Services announced the intent to award managed care contracts to two winning bidders: Amerigroup Iowa and Molina Healthcare of Iowa. Iowa Total Care currently holds a managed care contract with Iowa that lasts through 2025.
Starting next year, these for-profit companies will help manage the joint federal and state program that finances roughly $7 billion in health care annually for nearly 790,000 Iowans who are lower income or have disabilities.
The state’s decision to privatize the Medicaid system in 2016 has been a controversial one. Over the years, Medicaid enrollees and health care providers have reported reduced services or challenges with receiving accurate reimbursement. The abrupt exit of two carriers within the first years of privatization also caused turmoil for its members.
But the head of the state program says this round of contract negotiations includes steps to mitigate any future issues within the program.
“From when we first implemented managed care in 2016 to now, we’ve taken a lot of lessons learned,” Iowa Medicaid Director Elizabeth Matney said in an interview with the Des Moines Register.
What’s next for Iowa Medicaid?
There will be no immediate changes for Iowa Medicaid members with this week’s announcement. Four-year contracts with these managed care organizations begin July 1, 2023.
Medicaid members will be distributed among the three insurers as equitably as possible, Matney told reporters Wednesday. She did not say whether members could be assigned a new managed care organization, but noted member preference will play a role in the upcoming transition.
Matney said state officials are evaluating Medicaid provider networks to ensure members won’t have to seek a new provider if they transition to a new organization.