Ohio health company seeks to join Iowa Medicaid program

An out-of-state company hopes to become the newest insurer for Iowans under the state's Medicaid and Children's Health Insurance Program, or CHIP, company officials announced Wednesday.

The Dayton, Ohio-based health care company CareSource announced its intent to submit a bid for consideration to join Iowa's $6 billion program as state officials conduct their search for another managed-care organization later this year.

The Iowa Department of Human Services, which oversees the Medicaid program, will release its request-for-proposal to solicit bids for new managed-care organizations on or around Dec. 22, 2021. Also known as MCOs, these entities are private insurance companies that deliver health care services to poor and disabled Iowans through a contract with the state.

Iowa DHS officials will procure contracts with up to four insurers, according to the notice - meaning up to two additional managed-care organizations could join the state program in the near future.

Medicaid health benefits in Iowa currently are administered by two managed-care organizations - Amerigroup and Iowa Total Care.

The RFP deadline to submit a bid is summer 2022 and DHS is expected to award a contract, or contracts, sometime in the fall of 2022. If CareSource is selected, it would begin operations in summer 2023.

Even after a sometimes tumultuous five years of the privatized Iowa Medicaid program, CareSource officials say they are excited to help Iowa "re-imagine what Medicaid can do for Iowans."

"We think we can be competitive and financially viable in a state the size of Iowa," said Eric Van Allen, vice president of business development for CareSource, in an interview with The Gazette on Wednesday.

In 2016, Iowa's Medicaid program switched from a state-run system to a managed-care model that put private insurance companies in charge of administering Medicaid benefits.

Two managed-care organizations left the program due to what they described as chronic underfunding from the state. The first insurer, AmeriHealth Caritas, left in late 2017. It was followed by UnitedHealthcare of the River Valley in 2019.

However, CareSource officials believe Iowa's Medicaid market is now financially viable for at least four managed care plans.

While he did note Iowa "dramatically underfunded" services for the long-term supports and services population - or the members with the most complex needs - Van Allen said they've seen state leadership take steps to realign their approach to the program.

"The state has made significant investments over last five years," Van Allen said. "At this point, it looks like a much better situation than has been historically."

"We think we can be competitive and financially viable in a state the size of Iowa."

State leadership also has emphasized the program has stabilized, allowing them and the insurers to focus on improving health outcomes of Iowans on Medicaid, they told The Gazette earlier this year.

"We're not having the same type of conversations we were four or five years ago," Iowa Medicaid Director Elizabeth Matney told The Gazette. Matney was appointed to the role on June 1.

One of the largest not-for-profit managed-care administrators nationwide, CareSource solely provides coverage under government-run health insurance programs. It currently serves more than 2 million Medicaid members in Ohio, Indiana, Kentucky, West Virginia and Georgia.

Company officials also are seeking to join the Arkansas Medicaid program.

CareSource is "uniquely suited to serve Iowans," Van Allen said. The company invests in social safety net programs as part of a holistic approach to consumers, he said, making it an industry-leader in tackling critical issues around social determinants such as food, job and housing insecurities.

As part of their Medicaid coverage, members have access to CareSource "life coaches" who help them connect with resources in their community to help address barriers that impact overall health and well-being.

The company also partners with local not-for-profits and other social service programs to further aid members in their communities.

"The unique thing about that is we've done that as part of our expenses. We don't bill Medicaid for that," Van Allen said.

The company already has secured office space in downtown Des Moines and is in the process of obtaining licenses from the Iowa Insurance Division. Officials are "in the process of hiring key leaders to support work in Iowa," they said in a statement.

CareSource also has plans to join the federal Affordable Care Act insurance exchange and "provide another option for Iowans with its marketplace plans," according to the statement.

More than 750,000 individuals statewide rely on Medicaid for their health care. Children aged 21 and younger make up more than half the population enrolled with managed care organization, according to the latest state data.

Enrollment in the state and federally funded program has surged during the COVID-19 pandemic, adding more than 64,000 members as Iowans lost their jobs and their employer-based health insurance plans. That jump represents a roughly 15 percent increase in enrollees since the pandemic began in March 2020, according to data published in August.

Amerigroup currently oversees 58 percent of the member population, while Iowa Total Care holds nearly 42 percent of the member market share.

Amerigroup's contract ends in 2023, and Iowa Total Care's contract is up in 2025.