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Senator Ragan blasts Medicaid privatization as millions needed for corporate payouts



This news story was published on November 1, 2016.
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State Senator Amanda Ragan

State Senator Amanda Ragan

MASON CITY – Today, Senator Amanda Ragan had plenty to say about the Medicaid privatization implemented by Governor Terry Branstad after it was reveled that $33 million in additional corporate payout is needed for the program.

“Many correctly predicted Governor Branstad’s hasty handover of the state’s Medicaid health care system to for-profit, out-of-state companies would not be in the best interests of Iowans,” said Senator Amanda Ragan of Mason City, co-chair of the Health Care Policy Oversight Committee. “So far, Medicaid privatization has been a nightmare for hundreds of thousands of elderly and disabled Iowans and their families, as well as for thousands of local health care providers.

“Surveys show that privatized Medicaid has reduced help for Iowa families, cut the quality of services provided, and increased financial strains on our state’s health care employers,” said Senator Joe Bolkcom of Iowa City, a member of the Health Care Policy Oversight Committee.

“In response, Governor Branstad wants Iowa taxpayers to reward the companies responsible by handing over even more tax dollars to them.”

“Republican legislators made a terrible mistake by refusing to join Democrats in our opposition to Governor Branstad’s Medicaid mess,” said Senator Liz Mathis of Robins, a member of the Health Care Policy Oversight Committee. “I’m concerned this new $33 million increase will be followed by demands for more money from the Wall Street firms now managing the health care of one in six Iowans.”

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Contents of email from Jess Benson, senior legislative analyst with the non-partisan Iowa Legislative Services Agency, to Democratic and Republican legislative staff

Subject: Medicaid MCO rate change

Good Morning-

Yesterday afternoon we had our regular Medicaid forecasting meeting with DHS and DOM and although we are making some final adjustments to the number and the new forecast won’t be available for a week or two, there was important news that I wanted to share with you. Based on a review of recent Medicaid data by DHS and Milliman, the Administration has decided to increase the capitation rates paid to the MCOs by $33.2 million state ($94.5 million federal) for the first MCO contract time period spanning the final months of FY 2016 and FY 2017.

Capitation rates for the MCO contracts were originally developed using FY 2014 data and with only 6 months of Iowa Health and Wellness Program data and since this time there have been some major shifts in health care spending trends. Two of the major drivers are:

• When the capitation rates were developed the Iowa Health and Wellness Program was just getting started making it difficult to estimate the overall health of that population and the types of care and services they would need(inpatient hospital vs. outpatient hospital vs. physicians’ offices). Current spending trends the population have ended up significantly higher than the rates developed. One thing to note, the difference in the federal and state numbers is greater than the regular Medicaid FMAP rate (56.28%) because much of the rate adjustment impacts the Health and Wellness population and they receive 97.5% federal FMAP rate.
• Another significant driver that lead to the rate increase was prescription drug costs. The capitation rates do not include the rapid rise in drug costs we have seen over the past several years. I’m sure most of you are aware of the new hepatitis C curing drugs that cost around $80,000 for a complete treatment and the increase in the EpiPen cost, but there have also been significant increases in a number of other drugs leading to higher drug spending. These increases have been partially offset by higher drug rebates, but the state keeps the drug rebates while the MCOs are responsible for the higher costs incurred by both the Iowa Health and Wellness and the Medicaid populations. This is one of the factors that lead to a larger surplus at the end of FY 2016.
The factors above weren’t the only ones that lead to the rate changes, but were the leading causes. I’m sure you will have many conversations with the DHS over this decision in the months to come, but the message they gave me was that to be fair to the MCOs and to the providers and patients they serve, the Administration felt it was necessary to make this change.

As I said above, it will probably be a week or two before we have a Medicaid forecast, but for FY 2017, we are probably looking at shifting from several million dollar surplus before this rate adjustment to a $20-$30 million dollar need.

Please let me know if you have any questions.

Jess

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24 Responses to Senator Ragan blasts Medicaid privatization as millions needed for corporate payouts

  1. Tax Payer Reply Report comment

    November 3, 2016 at 9:48 pm

    Wonder if she ever heard of ‘Affordable Care Act’ and how she feels about that DISASTER…(aka : obamacare). City, county, and state employees pay minimum for their health insurance premiums….should be paying more. She’d be all supportive if the Governor was a democrat.

  2. Rahmbo Reply Report comment

    November 2, 2016 at 5:31 pm

    These medicaid privatization schemes are like inserting tapeworms into the money stream to extract whatever they can. They are parasites, adding no value to medical care, just sucking up the skim.

    As long as these worthless middlemen are pals of the pols and kickback enough profit as donations to their employees in the statehouse, it will continue.

    While Hillary may have perfected this sort of scam, repubs are in it whole-hog. No offense meant to hogs.

  3. Anonymous Reply Report comment

    November 2, 2016 at 2:10 pm

    Make the public servants pay for THEIR own health care insurance and we would save billions state wide.

    • Anonymous Reply Report comment

      November 3, 2016 at 8:11 am

      Great comment. Include the teachers in that and look at the taxpayer savings. The schools would have all the money they need for education.

      • bodacious Reply Report comment

        November 3, 2016 at 2:53 pm

        Yes, and there wouldn’t be any teachers. By the way, teachers don’t get free health care. I know that concept is hard for you to understand, but they pay just like you…if you do.

        • Anonymous Reply Report comment

          November 3, 2016 at 4:54 pm

          I pay and pay a lot. On top of paying for mine I have to pay for part of theirs and public workers as well. Let them pay for all of theirs just like I do.

          • bodacious

            November 3, 2016 at 6:22 pm

            Then raise their wages so that they can pay.

  4. Bridgett Reply Report comment

    November 2, 2016 at 11:50 am

    I am incredibly disappointed in the state system.

    A 20 year old impregnated by a non-participating, future dead-beat father, was told by her OB that with a prescription she would be able to get a free breast pump with a prescription as the majority of insurance carriers would cover it.

    Why would an insurance company pay for that? Simply because it will save THEM money over time: the baby will have a stronger immune system and be sick less often than a formula-fed baby.

    The State will not do it; will not even pay a portion!

    She was told to call WIC, she did. They will only provide a manual pump and under the “special circumstance” of her returning to work she would be provided a battery operated pump. How is that a special circumstance?
    She was working before and plans to do so after the normal amount of healing; furthermore, how is a woman on assistance to afford the mountains of batteries required to use a breast pump daily?

    The State would not only save money on health care for that child but on other assistance as well. No WIC providing supplementary formula, less FIP, and less food stamp expenditures…not to mention all the batteries not in the landfills.

    • Anonymous Reply Report comment

      November 2, 2016 at 12:03 pm

      She should have kept her knees together. Then she wouldn’t have to depend on the state to take care of her. These people have no responsibility and should not be allowed to have children. They can’t even take care of themselves. How are they going to take care of a unwanted child?

      • Bridgett Reply Report comment

        November 2, 2016 at 3:02 pm

        Why is all your finger pointing at the woman?
        Why don’t people like you ever point fingers at the deadbeat men that walk away?
        Her ability to care for her child is diminished by the “father”.

        You didn’t even address the issues brought up- obviously you are one of the turd trolls on here making up for your lack of confidence by attacking people anonymously.
        Furthermore, your ability to comprehend all the words written demonstrates why Iowa schools are falling behind, NO reading comprehension!

      • Bridgett Reply Report comment

        November 2, 2016 at 3:06 pm

        She is a wanted child in her mother’s eyes; at one point the father’s too.

        • Anonymous Reply Report comment

          November 3, 2016 at 8:09 am

          They just wanted a child for more welfare money at the taxpayer expense. She should be fixed so she can’t have anymore.

          • Bridgett

            November 4, 2016 at 10:09 am

            1. She was not on assistance until the man dipped out.
            2. You suggest she should be fixed like an animal; is there a certain demographic that would be spared from your social agenda?

          • Anonymous

            November 4, 2016 at 10:14 am

            She is a animal. No morals. Does not deserve to have children she can’t take care of. You either.

      • Calvin R. Reply Report comment

        November 2, 2016 at 3:44 pm

        So would you suggest a law preventing certain people from having children?

        After you think about that and realize it will never happen, what other solutions do you have?

        • Bridgett Reply Report comment

          November 3, 2016 at 7:49 am

          Guessing that is aimed at Anonymous?

  5. Anonymous Reply Report comment

    November 1, 2016 at 5:31 pm

    Strange. She never thought that way about Obamacare.

    • anonymous Reply Report comment

      November 1, 2016 at 10:46 pm

      Nice diversion. You must be anxious to pay that $33 million in taxes because it will be coming out of our pockets.

      • Anonymous Reply Report comment

        November 2, 2016 at 6:35 am

        Nice try. The money is already there. We saved it by going private on Medicaid, plus 110K more that was saved.

        • bodacious Reply Report comment

          November 2, 2016 at 8:36 am

          We only have the governor’s word that this program is good for Iowans. The majority of providers and patients don’t think so. An extra $33 million this year, how much next year? And the 110K (which should be M) is his estimate on the savings. We have yet to see it. As I have said before, this money goes to the executives of these companies. UHC’s CEO was paid $66 million last year. Do you think that is fair? Do you believe that he is going to take a pay cut this year because of rising costs to his customers? What about the other execs at these companies? Do you believe they are cutting back on their spending because of the tough times? They are not. The tough times are on us, as taxpayers, and the governor doesn’t care.

          • Anonymous

            November 2, 2016 at 8:43 am

            You are right. It should have been “M”. And, we would be in a lot worse shape if we had a Democrat as governor. Look what the last one “Culver” did in one term. He almost destroyed the state.

          • bodacious

            November 2, 2016 at 9:13 am

            Another nice diversion. And, yes, Culver was not one of our better choices in this state. I don’t have a problem saying that unlike most of the Trump supporters who casually overlook all of his shortcomings (that seems like such a bland word for the vast number of them).

          • Anonymous

            November 2, 2016 at 9:43 am

            Talk about diversion. What does Trump have to do with this subject?

          • bodacious

            November 3, 2016 at 6:24 pm

            I am guessing you are a Trump supporter. He is in favor of privatizing Medicaid just like Terry. I am pretty sure he has some financial interest in doing so.