Regarding Gov. Terry Branstad's unilateral decision to turn over management of Iowa's Medicaid to contractors, the real cost of this is the management fee: 12.5 percent maximum of the annual budget, or about a half a billion dollars.
This means that in a program that currently costs $4.2 billion, Gov. Branstad is essentially cutting the budget by a half a billion bucks. Even if you assume the change will save the state the questionable $51 million for the first six months, does the Branstad caucus believe we can keep this program running smoothly by taking $450 million out of it? Come on. If managed care is that much more efficient, let the Department of Human Services do it, add employees, maybe a consultant or two, and get it done. If they can't do that within a $450 million budget, then go the other way.
By giving a half billion dollars in fees to the all but criminal contractors, who may be worth nothing more than a RICO investigation by the U.S. Department of Justice, it is certainly not the way to save money on the behalf of our citizens who may very well need life sustaining benefits from their Iowa Medicaid insurance.
If this program is put into place, I predict the savings will merely be a result of denying benefits and delaying payments down the road, to the tune of $51 million during the first six months.