Iowa counties would save millions from Medicaid expansion

Cutting property taxes has long been a policy goal for Governor Terry Branstad, so why is he rejecting a path to save Iowa counties tens of millions of dollars a year on mental health services? As Tony Leys reported yesterday for the Des Moines Register, the Iowa Department of Human Services has estimated that expanding Medicaid as foreseen under the 2010 federal health care reform law would save counties between $27 million and $60 million each year.

Scroll down to read the full report the Iowa Department of Human Services. Leys noted in his story for the Register,

Many mental-health services are now administered by counties, which spend about $130 million per year on them, said Jennifer Vermeer, director of Iowa's Medicaid program. Her agency estimated that the Medicaid expansion would lift $27 million to $60 million of those costs from counties' shoulders. The wide range depends partly on choices the state would make on how extensive benefits would be.

"These all are ballpark," Vermeer said of the estimates. She said Medicaid would cover mental-health treatment costs, such as doctor visits, medication and hospitalization. However, the counties still would have to finance other costs, such as residential care and job coaching.

The Iowa Association of Counties supports the Medicaid expansion, as do several advocacy groups involved with the mental health profession.

Branstad is determined to improve the IowaCare program as an alternative to expanding Medicaid in Iowa, but IowaCare does not cover mental health services.

Many state lawmakers from both parties served in local or county government before being elected to the Iowa legislature. But as Bleeding Heartland discussed here, Republicans in the Iowa House and Senate are so far solidly behind the Branstad administration's position on Medicaid. Democrats who control the Iowa Senate are equally determined to press for Medicaid expansion.

I am seeking comment from the Branstad administration on whether they might pursue the Arkansas alternative: purchasing private health insurance policies for all adults who would qualify for Medicaid under the expanded eligibility. Such a plan will probably turn out to be more expensive, and it's not clear whether the insurance policies will be as good as Medicaid coverage, but it might be more palatable to Branstad.

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