DES MOINES — Plans to switch Iowa’s $4.2 billion Medicaid program into private management would be on indefinite hold under legislation passed Thursday in the Democratic-controlled Senate, but the bill is not expected to advance in the GOP-run House.
The chamber voted 29-19 for the bill, which would terminate the state’s contracts with three private companies hired to take over the program. The one-page bill would essentially direct the Iowa Department of Human Services to give 30 days’ written notice to terminate the contracts and pursue “other initiatives to realign the health care delivery system.”
Senate President Pam Jochum, D-Dubuque, said the new system that is scheduled to take effect March 1 has been confusing. She said the three private companies have given conflicting information to Medicaid recipients, their families and the health care providers around the state that offer services to those recipients.
Jochum expressed her own frustrations with ensuring continuing coverage for her adult daughter, a Medicaid recipient with disabilities.
“We are not bringing this before this body for any reason other than it isn’t ready,” she said. “It isn’t the right plan.”
House Speaker Linda Upmeyer, R-Clear Lake, said after the vote she did not plan to bring up the bill in the Republican-majority House, predicting Gov. Terry Branstad would veto it.
The governor, a vocal supporter of the switch, has said it would provide better care and contain growing costs. He was critical of the Senate bill but stopped short on Monday of threatening to veto it if it came to his desk.
Still, three Republican senators voted for the bill.
Others, like Sen. Jason Schultz, R-Schleswig, said the switch to private companies is included in the state’s current and future budget projections, and to backtrack now would be more expensive.
The nonpartisan Legislative Services Agency estimated the Senate bill would increase the state’s costs by about $27 million in the current fiscal year and $111 million in the fiscal year that starts in July.
“To go back ... would eliminate the progress that’s already been made,” Schultz said.
The bill was introduced amid growing tension in the Legislature over the future of Iowa’s Medicaid program, which provides health care to roughly 560,000 low-income and disabled residents, including children. It is funded with state and federal dollars.
Human Services, which currently oversees Medicaid, estimated last year that the privatization switch would save the state more than $50 million in the first six months of 2016. That figure is up in the air after federal officials delayed the switch from Jan. 1 to March 1 amid concerns about Iowa’s readiness for privatization.
If the managed-care switch does proceed, Senate Democrats have introduced a bill this session that would establish some state monitoring of the program to ensure the transition is working, among other bills related to the new Medicaid implementation.
It was unclear whether the measures would pass. Senate Democrats also recently sent a letter to President Barack Obama and other federal officials asking them to end the privatization move.