UnitedHealthcare of the River Valley, the insurer that handles coverage for the largest population of Iowans on Medicaid, is withdrawing from the state’s program, officials said.
In a sudden announcement Friday, the managed-care organization — or the private insurance company that handles coverage for Iowa’s poor and disabled residents — will exit Iowa’s program “in the next several months,” according to the Iowa Department of Human Services.
“Today I ended negotiations between the state of Iowa and UnitedHealthcare because of terms that I believed to be unreasonable and unsustainable,” said Gov. Kim Reynolds in an emailed statement.
“... We have continued to work in good faith, along with the legislature to make improvements to the managed care system, including a substantial increase to funding this past year. Unfortunately, UnitedHealthcare continued to make additional demands that I found to be unacceptable, including a provision that would remove pay for performance measures that would hold them accountable,” Reynolds said.
More than two-thirds of the 623,000 Iowans on Medicaid are members of Edina, Minn.-based UnitedHealthcare. The MCO joined the IA Health Link program when the state first switched to a privatized program from a state-run system in April 2016.
The insurer now handles coverage for nearly 427,000 Iowans according to the latest Department of Human Services data.
“Ensuring that our members receive the best care, and that our program is sustainable for the long-term, is our highest priority. The governor and I have both been firm that our MCOs need to be held accountable and I applaud her for her support in that effort. This is the right thing to do for our members and for taxpayers,” Department of Human Services Director Jerry Foxhoven said in a statement.
Officials said details of the exit, including the timeline of the transition for UnitedHealthcare members to over managed-care organizations, still is unknown.
“We are honored to have served Iowans in the IA Health Link plan for the past three years, but persistent funding and program design challenges make it impossible for us to provide the quality care and service we believe people deserve,” UnitedHealthcare said in a statement.
“Therefore, we will no longer be able to participate in the program and will work to ensure a smooth and seamless transition for all of our IA Health Link members. We remain committed to serving our nation’s most vulnerable people and communities through the many sustainable, performance-based state Medicaid programs in which we currently participate.”
Current enrollees will be sent notices soon.
“I want to assure Iowans that the state will work closely with UnitedHealthcare over the next several months to minimize disruption and ensure a smooth transition to the two other managed care companies,” Reynolds said in her statement.
In November, the state moved nearly 215,000 Medicaid enrollees served by AmeriHealth Caritas Iowa to UnitedHealthcare after AmeriHealth said it would leave the program.