Iowa Awards Centene Medicaid Managed Care Contract

An article from

Dive Brief:

• Iowa has awarded Centene a new Medicaid managed care contract, extending the insurer’s participation in the state’s $6.7 billion Medicaid program for another six years.
• Centene subsidiary Iowa Total Care has held a managed care contract in the state since 2019, serving beneficiaries in Iowa’s safety-net insurance program with a rotating cast of other insurers.
• Total Care’s award, which the state announced last week, standardizes Iowa’s Medicaid contract timeline. Now, Centene’s contract, along with contracts held by Elevance and Molina, are all scheduled to expire in 2031.

Dive Insight:

The contract award maintains business as usual for managed care organizations, or MCOs, in Iowa Medicaid. In 2022, the Hawkeye State granted Molina and Elevance subsidiary Wellpoint Iowa contracts to oversee the care of its Medicaid beneficiaries, while Centene was riding out an existing contract.

Now, all three contracts are on the same schedule, while Iowa’s roughly 720,000 citizens on Medicaid and the Children’s Health Insurance Program should see no changes in benefits, according to state regulators.

Iowa, which enacted a Medicaid managed care model five years ago, spent $6.7 billion on Medicaid in its last fiscal year. Of that tranche, $6.2 billion went to MCOs, according to the state’s Medicaid dashboard.

Centene, which currently covers a little less than one-third of that population, received almost $2.8 billion in the 2023 fiscal year. Since the insurer first began covering Iowa Medicaid beneficiaries, it has received almost $9.5 billion from the state.

Iowa’s state legislature voted to privatize Medicaid in 2016 in a controversial decision, as providers said handing the program over to for-profit entities would create barriers to healthcare access.

Contracting with private insurers is the dominant method of Medicaid delivery in the U.S., with almost all states adopting some sort of managed care model. However, concerns about quality have dogged managed care, with research finding high rates of coverage denials sparking a congressional investigation into MCOs.

After the state transitioned to the new model, three payers held managed care contracts, but AmeriHealth Caritas withdrew in 2017 and UnitedHealthcare in 2019, citing major financial losses in the state.

Iowa received five bids for Medicaid contracts in 2022 before issuing the additional awards to Molina and Elevance.

It’s been a busy year for Medicaid awards, with Mississippi, Rhode Island, Kansas, Florida, New Hampshire, Texas, Virginia and Michigan all issuing new contracts.