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Challenging Year for Medicaid

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There is trouble brewing in the state's $1.3 billion Medicaid budget, and legislators are already talking openly about tough decisions that may need to be made when they head back to the Capitol in January.  Medicaid provides health insurance for 680,000 low-income adults and children.  It also pays for long-term care services for Iowa's seniors, from nursing home care to services that support seniors in their homes. And as many of you know, it also pays for a variety of health and supportive services, including supports that allow people to live in their own homes. 

The Department of Human Services says they need an additional $68 million to get through this current fiscal year (which ends on June 30, 2015).  Without those dollars, waiting lists will continue to grow and the state may have to make difficult decisions when reviewing the needs of people receiving Medicaid services.  In addition, the Department of Human Services says they will need another $202 million to get through next year (and that doesn't include money needed to eliminate waiting lists).

Right now, there are large waiting lists for several of the state's Home and Community Based Services (HCBS) waivers which provide support for people with disabilities wanting to live independently or with their families.  That list continues to grow because state funding for these waivers has rarely kept up with demand, even after a significant ($6 million) additional appropriation in the 2014 legislative session.  This will continue to be a challenge when you look at the overall budget crunch the state is facing in 2015.

Lawmakers will be looking for ways to do more with less money, and will be asking hard questions so they can find out which programs work, and which programs aren't meeting their goals.  One strategy that we hear more and more is moving more of Medicaid into managed care. While this rumor has been out there for a while, it is a fact that states are increasingly moving to the use of managed care and other integrated care models in serving their Medicaid beneficiaries. According to the federal Centers for Medicare & Medicaid Services, more than 70% of the US Medicaid population is enrolled in some form of managed care. 

  • You can read more about Iowa's Medicaid managed care profile (from CMS) here. 
  • You can review the Department of Human Services and Iowa Medicaid Enterprise budget requests here.