Kudos to Sen. Liz Mathis of Hiawatha and Amanda Ragan of Mason City for introducing Senate File 156.  This bill is meant to mitigate some of the most egregious problems created by the Republican-led privatization of Iowa’s $6 billion Medicaid program.  The Senators, like so many Iowans, understand privatization has been a horrendous failure. Iowa’s 600,000 poor and/or disabled citizens can no longer assume they will receive medical care when it is needed.  As recently as May 8, 2019 the Des Moines Register published an article by Tony Leys, titled:  “Medicaid director meets with Iowans worried about United Healthcare’s exit.  ‘You can’t calm our fears,’ one Iowan says.”

Under Iowa’s system of Managed Care Organizations (MCOs), the state pays private, for profit, companies a set amount of money to oversee health care services.  This means those who make the decisions about what or if treatment is needed are employees who have never seen the people in need or their doctors or other healthcare providers.  These decision makers can and do require prior authorization for treatments in order to decide if the scope of the prescribed treatment is appropriate or whether a treatment is even necessary.

The Des Moines Register investigated 200 cases that were appealed to Iowa administrative law judges by Medicaid recipients since 2016.  The appeal process is fraught with repeated administrative and legal roadblocks patients and their families must deal with when they are trying to secure care.  Families must find ways to care for loved ones who are losing their ability to care for themselves when the denied homecare services they received under the Medicaid fee-for-service system. Should a Medicaid patient win an appeal, the MCOs routinely re-evaluate the patient’s health needs, which has led to another denial of care in as little as 60 days.  And the difficulties and delays begin again. http://features.desmoinesregister.com/news/medicaid-denials/ 

MCOs delaying tactics reduce the number of doctor visits and/or  the number of treatments/procedures performed.  If  MCOs can reduce care, they can make profits. If not, they lose money.  Hence, delaying, reducing or denying care makes it appear on paper that they are reducing costs. There are, however, unseen costs that are shifted to patients by way of human suffering and added monetary costs to the most vulnerable and least able to pay in our society.

Doctors and other healthcare providers too are affected.  MCOs delay payments for months or deny payment for services that should be covered. For people in nursing homes, people with chronic illnesses, and disabled people who for the most part are not going to improve, reduced services can be not only dehumanizing, but life threatening.

Bill 156 includes provisions to remove patients with complex medical needs from MCOs and return them to a fee-for-service, state managed program.  It would also end the requirement of prior authorization for substance abuse treatment and make it easier for Iowans to change insurance.

There are many variables to consider when discussing how to fix this mess we are in.  Prior to the change in January 2016, administrative costs for Medicare were approximately 3%.  Private insurers administrative costs are generally between 12% and 17%.  The assertion that the savings generated by privatization would offset the higher administrative costs of MCOs cannot be substantiated.