Three Republicans join Iowa Senate Democrats in vote to terminate Medicaid privatization

This morning the Iowa Senate passed Senate File 2125, which would terminate contracts the state has signed with insurance companies picked to manage care for Iowans on Medicaid. Governor Terry Branstad announced his administration’s “modernization” plans early last year and selected four managed care providers in August, with a view to fully privatizing Medicaid by January 1, 2016. The state later terminated a contract with one of those four companies, and the federal government refused to grant the necessary waivers, saying Iowa would not be ready to shift to managed care until March 1 at the earliest.

Iowa Senate leaders made clear on day one of this year’s legislative session that Medicaid privatization would be a pressing concern. Senate President Pam Jochum has been sounding the alarm since last year, worried about how privatization would affect her developmentally disabled adult daughter and other Iowans with special needs. Jochum gave the opening and closing remarks in support of Senate File 2125 today. She repeatedly warned that the Branstad administration has tried to do too much, too fast, without input from state lawmakers or other stakeholders with expertise in the area. Fellow Democrats Chris Brase, Liz Mathis, Mary Jo Wilhelm, Rich Taylor, and Amanda Ragan echoed many of those concerns in their speeches.

During the floor debate, Republican State Senator David Johnson explained why he would vote for the bill. He read e-mails from numerous constituents expressing concern about access to health services for their loved ones on Medicaid. He pointed out that Minnesota took 20 years to transition to managed care, while Iowa is trying to implement the same changes over just one year. “It’s moving too fast. That’s the issue here. We need to put a dagger in this.”

Last week Johnson became the first GOP lawmaker to come out in favor of terminating the privatization program; I enclose below excerpts from Jason Clayworth’s report for the Des Moines Register. Johnson’s fears about “children at risk of losing services” stem from the failure of the managed care companies to sign contracts with thousands of providers who have been treating Iowans on Medicaid, including children on HAWK-I (Iowa’s version of the State Children’s Health Insurance Program). Scroll to the end of this post for more details on that access problem, based on data from the Iowa Department of Human Services.

Republicans who spoke against the bill today included Senators Jason Schultz and Mark Chelgren. Schultz claimed Democrats took “ownership” of managed care by putting assumptions about Medicaid savings into the health and human services budget for the current fiscal year. During her concluding remarks, Jochum pushed back hard against the idea that a vote for last year’s health and human services budget was a vote for managed care. Rarely do I ever agree with Schultz, but I think Senate Democrats walked into a trap there. The Branstad administration’s estimates on reduced Medicaid costs after privatization were never grounded in reality, but Democrats accepted those assumptions in the budget they passed–not because they supported the Branstad effort, but likely because doing so gave them an extra $51 million to spend on other health-related priorities.

Chelgren argued that lawmakers should keep their word after voting for a budget that assumed Medicaid would shift to managed care. He likened the situation to Congressional Republicans voting to repeal the 2010 Affordable Care Act without having a plan ready to replace “Obamacare.” The analogy fails because terminating Medicaid privatization that hasn’t been fully implemented would not be like repealing Obamacare after several years of operation. The status quo is an available and less disruptive alternative to serving the 560,000 Iowans on Medicaid. Chelgren claimed that halting Medicaid privatization and starting the process over would “betray” those who signed up as providers under the new system. That argument made no sense; public comments from Iowans on Medicaid and health care stakeholders have overwhelmingly opposed the Branstad policy.

During her concluding remarks, Jochum refuted claims that 39 other states have put Medicaid in managed care. In reality, only four states have fully privatized the system, as the governor is doing.

Shortly after the floor debate, senators voted 29 to 19 to approve SF 2125. Republicans Jake Chapman and Tom Shipley joined Johnson and all 26 Senate Democrats. Notably, those three Republicans all represent strongly GOP districts, not marginal seats.

The bill now goes to the Iowa House, where Speaker Linda Upmeyer has indicated she does not plan to bring the measure up for debate. For a nurse practitioner by training, Upmeyer is remarkably insensitive to ordinary people’s health care needs–not only those on Medicaid, but also chronically ill Iowans who could benefit from medical cannabis. A post in progress will catch up on the state of play for medical marijuana in the Iowa legislature.

UPDATE: Added more links and comments on the Medicaid debate below. According to Erin Murphy, Upmeyer confirmed today that the House will not take up SF 2125, because the governor would certainly veto it. Given how unpopular Medicaid privatization is, the public would likely support a legislative override of that veto. But at least five more Republican senators would have to change their stands to override a veto in the upper chamber. In the House, at least 24 GOP state representatives would need to support an override, assuming all 43 House Democrats voted in favor.

From Jason Clayworth’s February 5 story for the Des Moines Register on State Senator David Johnson’s stand on Medicaid:

Sen. David Johnson, the top-ranking Republican on the Senate Human Resources Committee, will cast the lone GOP vote in an important three-person subcommittee meeting Monday that will determine whether the bill continues in the legislative process.

Johnson, whose seat is not up for election until 2018, said he realizes his support for the measure may be unpopular among some of his GOP peers. He hopes that by speaking publicly against the plan he can urge all 150 state lawmakers to put politics aside on this issue and act how they genuinely believe is in the best interest of Iowans.

“I don’t want this thing to become a partisan issue. That doesn’t help somebody who is struggling to make it through,” said Johnson, a conservative from Ocheyedan and a frequent participant in anti-abortion events. “There are children at risk of losing services right now.” […]

House Speaker Linda Upmeyer, R-Clear Lake, told reporters Thursday [February 4] that there is no point in even debating the bill since it would almost certainly be vetoed by Branstad.

But that’s where Johnson says he disagrees with the notion that a possible veto should preclude legislators from even attempting to act in a way they believe is in the best interest of Iowans.

“We need to be a partner in this,” Johnson said. “I don’t know (if we can find enough support to override a possible veto from the governor) but my support is not just a signal to the House, but the administration as well.”

Johnson continued, noting widespread concern about the lack of doctors that have signed contracts with the private companies and questions about whether people will have adequate services to meet their health needs.

“In our committee reviews of this issue, we aren’t getting the clear answers we need. And we’re talking about a large number of Iowans,” said Johnson, the only Republican on a three-member committee.

Iowa Senate Democratic press release, February 4:

Governor, Medicaid privatization actually means fewer health care providers for Iowa kids

DES MOINES – Today Governor Branstad claimed that “Managed care means more doctors for Medicaid patients.” However, when it comes to the 37,000 children who had been served by Iowa’s nationally praised Hawk-I health insurance program, new numbers from the Branstad Administration show those children will have access to far fewer health care providers under Medicaid privatization. (See DHS chart below)

Under Iowa’s Hawk-I program, nearly 34,000 health care providers had contracts with both of the companies chosen to administer the program. Of those providers, only 2,130 have signed contracts with all three Medicaid managed care companies for Branstad’s new Medicaid plan, according to data from the Iowa Department of Human Services.

“It is infuriating that the Governor took a nationally recognized program for providing health care for Iowa children, and basically destroyed its network of health care providers,” explained Senator Janet Petersen, a member of the state Hawk-I Board. “Under Governor Branstad’s Medicaid privatization mess, it will be more difficult for families find medical care for their kids. When health care is available, it will be less comprehensive.”

For example, children assigned to the AmeriHealth managed care organization will have an especially difficult time keeping their current providers or finding any local provider. Amerihealth has signed contracts with less than 15 percent of the health care providers who had accepted Hawk-I patients.

Hawk-i was Iowa’s nationally praised children’s health insurance program. In 2015, it provided health insurance for more than 37,000 children.

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UPDATE: Representative Dave Loebsack (D, IA-02) wrote to President Barack Obama this week urging federal officials “to deny Iowa’s request to transition to a privately managed Medicaid system if the state remains unprepared for the switch.” Excerpt from his February 8 letter:

“I have spoken personally to many Iowans who would be impacted by this change, including the parents of children with disabilities. Each day, these parents are scared that their children will not be able to access the life sustaining therapies they need once the transition is made. I urge you and your administration to carefully consider the consequences of this transition. Should you determine that the Iowa Department of Human Services is not prepared to provide an adequate level of care under the proposed new system, I urge you to deny their waiver request.”

Former Governor Chet Culver held town-hall meetings on February 9 in Coralville and Cedar Rapids urging Iowans to oppose Medicaid privatization. From Josh O’Leary’s report for the Iowa City Press-Citizen:

“This is arguably the most important public policy decision that’s been made in this state in the past 50 years,” Culver said Tuesday in a town hall meeting with about 25 people at the Coralville Public Library. “Never have we, as a state, made a policy decision of this impact that will directly impact the lives of 560,000 Iowans.”

Culver, who hosted a similar forum later in the day in Cedar Rapids, plans to hold additional town halls in other cities in the coming week and invited opponents of the plan to a rally Feb. 24 at the statehouse. […]

Culver, who argues that Iowa’s Medicaid model is recognized as one of the best in the U.S., said that of the $4.2 billion in state and federal dollars Iowa spends annually on Medicaid, only 4 percent currently goes to administrative costs. He said under Branstad’s system, the three private companies who will manage Medicaid will be allowed to charge 12 to 14 percent in administrative costs.

“More than $400 million annually will be taken out of the pockets of the Medicaid beneficiaries that need this health care — for medical procedures, for doctors’ procedures, for mammograms, you name it — and into the pockets of a privately held, for-profit corporation to do administration that would nearly quadruple what you as taxpayers are paying right now,” Culver said.

Incidentally, after not seeing any nominating petitions for Culver at my precinct caucus on February 1, I sought comment from Culver on whether he is still considering running for Congress in Iowa’s third district. I have not yet heard back.

In a statement following today’s Iowa Senate vote,

Branstad spokesman Ben Hammes said the administration plans to continue to move forward in securing federeal approval for implementing the transition to Medicaid managed care.

“Senate Democrats, and now former Gov. Chet Culver, are playing partisan politics with Medicaid and the health of Medicaid patients,” Hammes said in his statement. “The facts cannot be denied: Iowa has more than 20 years experience in managed care. Managed care means more doctors for Medicaid patients. Managed care means better access for those patients to doctors, and managed care means curbing the exponential cost growth associated with Medicaid — 39 other states can’t be wrong.”

Hammes failed to acknowledge points raised by Jochum: only four of those states have entirely privatized Medicaid, and several states that switched to manage care saw no cost savings.

SECOND UPDATE: The February 11 Des Moines Register published a guest column by Democratic State Senator Joe Bolkcom on today’s Medicaid vote. Excerpts:

Our governor refuses to admit that much of Iowa’s increased Medicaid costs have nothing to do with higher health care costs.

Medicaid is funded jointly by the federal government and the state of Iowa. Since 2012, the federal share has dropped due to Iowa’s greater economic strength compared with other states. The shrinking federal share increased Iowa’s annual Medicaid costs by $266 million.

In 2013, the Iowa Legislature picked up the counties’ share of Medicaid mental health services. This year, our state’s annual Medicaid cost was $324 million larger due to that decision.

Neither of these increases had anything to do with how Medicaid services are provided.

In fact, according to the nonpartisan Legislative Service Bureau, our costs per Medicaid patient are low and relatively constant compared with other states.

Here’s the heart of this issue.

Most of Medicaid goes to fund Iowa’s health care safety net. More than 70 percent of Medicaid dollars go to caring for about quarter of the Iowans in the program. They are the elderly and people living with disabilities.

If your parent, your spouse, or your child has a severe disability, the chances are that they will be on Medicaid. When things go very, very wrong, Medicaid provides the care that would otherwise bankrupt most Iowa families. […]

Putting Wall Street firms in between Iowa families and their Iowa health care providers won’t save money either and it won’t improve health care.

What it will do is take several hundred million dollars each year out of Iowa’s Medicaid budget and give it to out-of-state corporations in the form of guaranteed administrative fees and profits.

There are two basic ways the managed care companies will cut costs. One is by denying health care to Iowans, especially the Iowans whose health care is the most threatened and the most expensive. The second is by not paying Iowa providers the full cost of the health care they provide.

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  • Signs of Life?

    I’m encouraged to see Senator Jochum’s warnings nearing actual legislation. In the current ‘damn the establishment’ atmosphere, getting the votes to override a veto of this user-hostile healthcare scheme might only be a moderately heavy lift. Why do I say this? TB/Rastetter-backed candidates had their a**es handed to them in the caucuses. On his (far)right, TB has no more allies. The King/VanderPlaats wing is ascendent.
    Nobody has to be afraid of Terry now, (except maybe state workers). His overreach on insurance is a step too far and he thought he could ram it through (Like UofI prexy) and no one would dare challenge him.
    Iowa (and Iowa Dems in particular) have an opportunity to either vigorously fight for the greater public good or allow themselves (and their environment) to be ‘managed’ by BigAg/overnment. As a native Iowan who lives in both Des Moines and Marin co. Ca. I view TB/Rastetter as hustler/bullies fleecing an increasingly compliant flock. I am very happy to see pushback on anything that Branstad attempts. Since the last election cycle, (Hatch, vernon et. al) an autopsy for IowaDems seemed appropriate but now a small blip on the heart monitor attached to Iowa Democratic party shows still signs of life. The question is, do they have the will to live?

  • Call Majority Leader Upmeyer

    I suggest a campaign of phone calls to Linda Upmeyer, the Republican House Majority Leader, urging that the Senate bill be brought to the floor for debate. As noted above, she has suggested that it won’t see light of day because of an impending Branstad veto. So what?

    We Iowans need to see where our elected officials stand on this important issue. What’s more, we need to see which of them has the fortitude to stand up to Branstad. And what’s more, we need the chance to participate, by calling our Representatives (especially the Republicans) and Ms. Upmeyer to let the democratic process occur. She won’t represent us at all by holding up the bill.

    Call the House Switchboard at (515) 281-3221 and ask to be connected to her staff.