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How much money is Iowa saving by privatizing Medicaid? It’s a mystery.

Dylan Scott covers health care for Vox. He has reported on health policy for more than 10 years, writing for Governing magazine, Talking Points Memo and STAT before joining Vox in 2017.

Something strange is going on with Iowa’s Medicaid program, and it could be the hottest issue in that state’s governor’s race this November.

The Des Moines Register reported on Friday about the ever-shifting estimates on how much money the state is saving since it moved its Medicaid program in 2016 to managed care — the widely used system where private, though often nonprofit, health plans are paid by the state to run their Medicaid programs and administer benefits.

First, according to the Register, the Iowa health department reported that the state was saving $141 million (out of a $5 billion budget for about 600,000 enrollees) under managed care, without any further explanation except that it was a “projected annual range.”

Then they said it was a cumulative savings since April 2016, when the state switched over to managed care. Then they said it was for the current fiscal year.

Those are very different estimates. A single-year savings of $140 million would mean the state might be on track to save $280 million over two years. But if the $140 million is for two years, since April 2016, then the state is saving just $70 million a year.

Either way, the Register noted, these numbers are far below the $230 million that then-Gov. Terry Branstad predicted the state would be saving annually by now as he was advocating to privatize the Iowa Medicaid system. Yet they’re far higher than the $47 million the health department originally projected for this year.

Like I said, it’s strange.

Now Branstad is ambassador to China, and Medicaid managed care is overseen by his Republican successor, Gov. Kim Reynolds. She has upheld the program as a model of more efficient government. But she is going to face attacks over it in the November election, where she is favored but not quite assured of reelection.

Democrats will pick their candidate for governor in a June 5 primary. All three of the notable contenders — Fred Hubbell, a business owner who once worked for the state’s economic development agency; State Sen. Nate Boulton; and Cathy Glasson, a local SEIU leader — say they want to reverse the move to Medicaid managed care.

Recent blockbuster reporting by the Register is likely to only fan the debate. In a major investigation published earlier this year, the newspaper documented hundreds of cases where Medicaid recipients had appealed to state authorities because they believed they had been wrongly denied care by their health plan under the new privatized Medicaid system.

Here is the lead anecdote:

Ann Carrigan needs a special wheelchair to prevent her from choking.

The 70-year-old Spencer, Iowa, woman has advanced cerebral palsy as well as a brain injury from a vehicle accident that has left her unable to speak or walk.

Multiple medical officials, an administrative law judge and the Iowa Department of Human Services director all agree she needs the customized $4,200 wheelchair that helps her move her chair and sit at an angle so her atrophied muscles don’t cause her to choke or fall out.

But UnitedHealthcare and its doctors disagree and have taken the battle over Carrigan’s special wheelchair to district court. The company denied her request in December 2016 and maintains that a standard wheelchair will meet her needs.

”Information sent to us does not show this wheelchair is needed at this time,” UnitedHealthcare Dr. Walter Bradley wrote in a letter denying the request.

Managed care has become such an ingrained part of our system that I don’t think we often stop to think about it and weigh its pros and cons. The Kaiser Family Foundation estimated in 2016 that 81 percent of Medicaid enrollees, about 65 million people, were covered by managed care.

So is it mostly working? Are the horror stories described by the Register an aberration, maybe excused as a state transitioning itself to a new system?

I won’t pretend there is an obvious answer. In 2012, researchers at the Robert Wood Johnson Foundation sought to synthesize the available research. They concluded:

  • Savings from managed care have not materialized at the national level (the savings that do exist are concentrated in states that had higher reimbursement rates in their traditional Medicaid program before they made the switch)
  • Some states show improved access to care, particularly a usual source of care and reduced emergency room visits, under managed care
  • There is little evidence that Medicaid managed care improves the quality of care that Medicaid beneficiaries receive

On that last point on quality, data referenced by the Medicaid and CHIP Payment and Access Commission (MACPAC) — which they admitted has limitations in interpretation — showed that Medicaid managed-care recipients were less likely than people covered through commercial insurance to effectively manage their asthma with medications or to control their high blood pressure.

The results, in other words, are mixed. Yet almost the entire Medicaid program has been moved to this system.

There are good reasons for that — if nothing else, health benefits are difficult to administer and private insurers have more expertise than state governments. I wouldn’t expect a widespread relitigation of the value of managed care any time soon.

But this November, Iowa voters will have an opportunity to make their position known in one of the states to most recently make the transition.

This story appears in VoxCare, a newsletter from Vox on the latest twists and turns in America’s health care debate. Sign up to get VoxCare in your inbox along with more health care stats and news.