Share story

DES MOINES, Iowa (AP) — More than a third of patients in Iowa’s privatized Medicaid program will be unable to switch into one of the two remaining insurance companies as originally announced because the company doesn’t have the capacity to add more people, a state agency announced Tuesday.

The Iowa Department of Human Services said in a press release that Amerigroup will continue to serve people currently enrolled in its coverage but not additional patients.

The announcement means UnitedHealthcare will keep about 215,000 patients being sent to it after a third company, AmeriHealth Caritas, said it was leaving the health care program for the poor and disabled. AmeriHealth Caritas announced it was exiting at the end of the month over failed negotiations with the state regarding money. The state recently signed new contracts with Amerigroup and UnitedHealthcare, and it intends to hire a third company for coverage in 2019.

DHS originally told affected AmeriHealth Caritas patients they would be moved to UnitedHealthcare but could later choose Amerigroup. The department said in its Tuesday press release that Amerigroup could no longer take any of those patients, including those who actively chose the company following the AmeriHealth Caritas withdrawal.

Amerigroup did not immediately return a message. DHS said it’s received federal approval to temporarily suspend patient choice in the privatized system that involves managed care organizations, known as MCOs.

“In the future members again will have a choice in MCOs and will be notified when that choice is available,” according to the press release.

Iowa’s Medicaid program serves more than 600,000 people. The roughly $4 billion state-federal program was privatized in 2016 amid a push from state health care officials that it would improve services and save the state money. Some health providers and patients have complained that coverage has deteriorated for some since the switch, though the state has countered such complaints are not systemic and they’re being addressed. Future contract negotiations with private companies also make the claim over cost savings unclear.

GOP Gov. Kim Reynolds has repeatedly defended the privatization, as did her predecessor, former Iowa Gov. Terry Branstad.

Jane Hudson is executive director of Disability Rights Iowa. The organization helped launch an ongoing lawsuit against the state claiming the privatized system has cut services for disabled patients. She criticized Tuesday’s news.

“The whole point of choice is that they can choose managed care organizations who are meeting their needs and contracting with their providers,” Hudson said in an email. “We are very disappointed. The privatization of the state’s Medicaid system appears to be falling apart.”

Matt Highland, a DHS spokesman, said the agency continues to work with the insurance companies on the transition. It’s not immediately clear if the department must send new notifications to affected patients.