Dive Brief:
- Two of three private companies administering Medicaid in Iowa recently reported significant losses through the first six months of 2016, according to The Des Moines Register.
- AmeriHealth Caritas reported losses of $42.6 million and Amerigroup reported losses of $66.7 million. UnitedHealthcare, the third company, did not provide figures.
- Iowa transitioned to a managed care program earlier this year on April 1.
Dive Insight:
Companies providing Medicaid managed care services in Iowa recently reported losses totaling more than $100 million. The reports come just several months after Iowa privatized administration of its $4 billion Medicaid program, reigniting debate over this controversial move.
Switching to a managed care program is supposed to save Iowa money in the long run, but opponents say it might end up being more expensive than a state run program. State Senator Joe Bolkcom told The Des Moines Register if payers are losing this much money now, they will likely challenge the state healthcare cost estimates when it comes time to renegotiate contracts.
On the other hand, higher costs are to be expected as the state transitions to a privately managed Medicaid program. “During the initial phase, plans often incur start-up and related expenses that exceed revenues for that period,” Amerihealth spokesman Scott Bluebond said in an email to The Des Moines Register.