AmeriHealth Withdrawing from Iowa’s Privatized Medicaid Program

DES MOINES, Iowa  --  The state of Iowa has lost one of the three companies contracted to manage the Medicaid system privately.

On Tuesday, the Department of Human Services announced AmeriHealth Cartias is pulling out from the state's controversial privatized health care program. It’s one of the state's three managed care organizations.

Since the company took over the state Medicaid program last spring, it has complained the program wasn’t properly funded and cost them millions of dollars, despite former Governor Terry Brandstad's promise a privatized program would save Iowans money.

The company provided insurance coverage to about 200,000 Iowans. State officials says those patients will soon be notified by mail that they will be switched to one of the two remaining MCOs in the state. The director of the DHS says it's already searching for a replacement for AmeriHealth.

“We’re going to focus on being sustainable, maintaining costs, making sure MCOs manage care well. Since the beginning I’ve said, ‘if we can keep all three, terrific. If we can’t then okay, we'll find someone to fill that gap.’ That's what were going to do," said Jerry Foxhoven.

AmeriHealth’s withdrawl will take effect November 30th. Foxhoven says once a replacement is found, it will start on July 1st of next year. In the meantime, DHS says its goal is to inform and to insure continuity of care. However, Democratic Senator Matt McCoy, a lawmaker who fought against a privatized health care system, disagrees. He says the transition is too fast for Iowa’s most vulnerable population and is calling out Governor Reynolds to better address what he says is a “colossal disaster.”

“Governor Reynolds, it’s time for you to step up and be governor and tell Iowans how this managed care system is good for Iowans,” he told Channel 13. “It is costing Iowans more money and Iowans are dying as a result of the change. The system is being mismanaged.”

The state's remaining two MCOs were given a three percent increase to help cover their members’ health care services. The increase comes after some lawmakers raised concerns that paying companies more would create additional budget problems for the state. Foxhoven says the increase will not require the department to ask the legislature for more money or force cuts in different areas of DHS.