Iowa Medicaid Costs Nearly Tripled Since Privatization

September 24, 2018

By Tony Leys

The average cost of insuring an Iowan on Medicaid has climbed nearly three times as fast since the state hired private companies to manage the program, when compared to the previous six years, new state figures show.

Since fiscal 2017, the first full year of privatization, the per-member cost of Iowa's Medicaid program has risen an average of 4.4 percent per year, according to the non-partisan Legislative Services Agency. In the previous six years, the per-member cost rose an average of 1.5 percent per year, the agency said. 

The new cost figures come amid continuing controversy over whether Iowa should have hired private companies to run the $5 billion program. The shift’s supporters said it would slow growth in health care spending on the more than 600,000 poor or disabled Iowans covered by Medicaid.

The Legislative Services Agency compiled the new cost increase figures from past budget reports published by the Department of Human Services, which oversees Medicaid.

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