Republicans question Gov. Reynolds’ plan to cut $10 million from Medicaid
Barbara Rodriguez, Associated Press Published 12:39 p.m. CT Jan. 21, 2018
Iowa Republicans have started wading through the hard realities of mid-year budget cuts, and some are expressing reservations about a proposal from Gov. Kim Reynolds to reduce $10 million from the state’s health care program for the poor and disabled.
The cut to Medicaid would be the largest of Reynolds’ nearly $30 million in reductions to the current $7.2 billion budget that runs through June. Her staff claims it won’t reduce services, but there isn’t enough data to back up the argument and Reynolds will ultimately have to make her case to fellow Republicans who control the Legislature.
Some already appear wary of removing money from a program under scrutiny for reports of reduced services under privatization.
House Speaker Linda Upmeyer, a Clear Lake Republican, said she’s heard that concern privately from her caucus. She added the reduction seemed “counter-intuitive,” but she’s checking with the Iowa Department of Human Services, the agency that oversees the program, for definitive information.
“That’s the one I think … we really want to understand how that would be possible, because we’re actually inclined to think that doesn’t make sense,” she said.
Sen. Charles Schneider, a West Des Moines Republican who chairs a key budget committee, said similar discussions are happening in the Senate.
“As much as Medicaid has been in the news, we want to be sure we’re providing adequate funding for it,” he said.
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Private insurance companies took over Iowa’s Medicaid program in 2016. Since then, health care providers and Medicaid recipients have filed complaints about reduced services and delayed reimbursements. Representatives for the companies, which have dwindled from three to two in recent months, defend their work. The director of DHS also defends the new system but says he’s working on addressing problems.
Iowa’s Medicaid program has a roughly $4 billion budget that’s funded through the federal and state governments. Iowa is expected to pay about $1.6 billion in the current fiscal year, making it the second largest expenditure behind K-12 education. About 600,000 Iowans receive Medicaid services.
Peter Brantner, executive director of Crossroads Behavioral Health Services, expressed frustration at proposed Medicaid cuts because he’s seen no drop in patients to his organization, which has offices in southern Iowa and treats individuals with mental health and substance abuse problems.
“How would they affect the services that Medicaid members need to maximize their potential?” he asked.
Reynolds’ staff outlined the $10 million in savings at a meeting with reporters on Jan. 9, shortly after revealing the governor’s proposed cuts.
However, the nonpartisan Legislative Services Agency, which analyzes policy and budget proposals, told lawmakers last week that it’s hard to forecast Medicaid spending and that costs could end up above or below the budgeted amount.
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Reynolds’ press secretary Brenna Smith directed questions about the cut to the Department of Human Services. Agency spokesman Matt Highland said via email the reduction is based on a decline in Medicaid enrollment that’s now stabilizing.
“The governor’s budget projection is accounting for that stabilization of enrollment,” he said.
Highland didn’t respond to additional questions or a request for documentation.
LSA analyst Jess Benson said data shows a gradual enrollment decline in the first half of the budget year. If that continues, Benson said it’s possible the state could come in below spending projections, allowing Reynolds to argue the cut isn’t really a cut.
Benson said enrollment for January and February will be key, as winter months sometimes see enrollment increases. A Medicaid forecasting group that determines financial needs for the program will meet again in March to offer an updated estimate.
Rep. Dave Heaton, a Mount Pleasant Republican who leads a committee on Medicaid funding, said spending for the program typically includes estimates that are later updated. He pointed to a roughly $44 million surplus in the budget year that ended last June.
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“It’s a number that constantly moves and we don’t know where we’re going to end up,” he said of final Medicaid costs.
The extra money Heaton referenced ended up being used for additional payments to the private insurance companies running Medicaid. It’s still unclear how much more money the companies will get for the budget year that takes effect in a few months. The state must negotiate those terms with the companies, a reality that could create more financial strain down the road.
The budget proposals worry Kirsten Corrigan, a public health consultant in Marion whose 16-year-old son, Ryan, uses a wheelchair, is non-verbal and requires 24-hour monitoring. He receives most of his medical care through private insurance but gets some services through Medicaid.
Corrigan said looking at Medicaid through the lens of a spreadsheet does a disservice to people like Ryan.
“There’s been so many denials and delays,” she said of the experiences of families. “I think a lot of people are falling through the cracks, and there’s a lot of cost that’s not being reported because of that.”
UnitedHealthcare is taking responsibility for almost all 215,000 Iowans who previously received their Medicaid benefits via AmeriHealth Caritas, which abruptly pulled out of Iowa after a contract dispute with state officials. Wochit