Collapse: It's the best description of Iowa's Medicaid network and Gov. Terry Branstad's ideological crusade to gut the program.
Providers have raged since Branstad this year privatized the bulk of the program that provides health care insurance for roughly 20 percent of Iowans. Anecdotes about slow payments and rejected services are piled high. Democrats demanded more oversight of handover of the $4.2 billion to a trio of private insurers. In March, federal regulators urged Branstad to postpone the shift, citing the state's unreadiness. But Branstad, preferring ideological purity over reality, wasn't having any of it.
Iowa will save more than $100 million this fiscal year, Branstad insisted, even as the insurers themselves reported huge losses and demanded more cash.
Branstad's narrative crumbled earlier this month, however. That's when The Des Moines Register got its hands on internal memos and emails between state officials and the insurers.
CliffsNotes: Branstad's partisan pipe-dream is something of a cash-bleeding nightmare. In fact, the state's October offer to pony up more cash incensed executives at the insurance providers tasked with managing this mess.
"We are extremely disappointed in the amended rate offer, as it does not address the significant rate issue identified and documented. … The department’s rate offer is not actuarially sound and is not acceptable to us," AmeriHealth Caritas Regional Vice President Russell Gianforcaro wrote to state Human Services Director Charles Palmer.
Let's unpack Gianforcaro's statement a bit.
Two of the three firms reported losses in the tens of millions shortly after taking control of Iowa's formerly public, once-lauded health care system for the poor. The Branstad administration, which promised huge taxpayer savings, offered them more money through an amended rate. AmeriHealth scoffed at the pittance.
Taken on its own, it would be easy to dismiss that firm's complaints as little but profit-driven sour grapes. But, as a whole, it's increasingly clear that, less than a year in, Branstad's expedition into for-profit welfare is failing corporate boards and Iowa's poorest, alike.
Other states have done it and succeeded, Branstad says. Even states run by Democrats have contracted-out a portion of Medicaid services, he argues.
Don't be duped.
Yes, even the New Yorks of the world have privatized bits and pieces of the pricey health care system. Branstad's move is something entirely different. Iowa's shift was sweeping and almost complete. Many states — weary of increasing cost — have nibbled around Medicaid's edges. Iowa, under Branstad's insistence that he alone had monopoly on fact, offered up the whole pie.
Privatized Medicaid in Iowa isn't working for the the poor. It's shortchanging providers. It's bilking the very taxpayers who were promised the moon. It's even failing the one group that stood to most benefit, the firms paid hundreds of millions to handle it.
And it's all because Branstad opted to rush over listening to reason. It will continue because Republicans in the Legislature refuse to provide proper oversight. It won't end until a devastating collapse leaves corporate boards in open revolt and Iowa's poorest struggling to access health care.
Or, this time, Iowa's GOP Legislature could stand up to Branstad's ideological purity, accept reality and actually govern before it's too late.