- Associated Press - Wednesday, May 6, 2015

DES MOINES, Iowa (AP) - The Democratic-led Iowa Senate approved a $1.9 billion spending plan Wednesday for state health and human services departments, which includes an oversight committee to watchdog the governor’s plan to privatize Medicaid.

The budget was approved in a 26-22 vote. It provides slightly less overall funding than sought by Gov. Terry Branstad, but more than the proposal from the Republican-controlled House. The plan, which is the largest general fund budget bill, includes funding for Medicaid, public health programs and veterans.

Sen. Amanda Ragan, a Mason City Democrat, said the bill would include funding to help provide child care assistance to more families and create an oversight committee to supervise the governor’s plan to privatize Medicaid services. The legislation also includes money to keep two mental health institutions open that Branstad has slated for closure, with most coming from federal grant funding.

The oversight efforts, Ragan said, were key to protecting patients as Iowa transitions Medicaid administration to two or more managed care organizations, to which Iowa will pay a fixed amount per enrollee to provide health coverage. The Senate bill projects the state will save money with such a ransition, though they want to impose some rules about how the organizations can use Medicaid funding and how much profit they can realize.

“I’m an optimist. And I can see that managed care has some potential positive impacts to our healthcare system. But I’m also a realist. And we all know rushing to force such a large transition will have potentially severe negative consequences, often on vulnerable Iowans,” Ragan said.

Branstad spokesman Jimmy Centers said the Senate’s proposed restrictions could delay the proposal process for managed care companies, which has already started.

The Senate legislation does not include language requiring Branstad to sign off on payments for Medicaid-funded abortions. That policy, developed in a compromise health care deal by lawmakers two years ago, effectively halted Medicaid payments for abortion in Iowa because medical providers simply stopped submitting claims. Senate Democrats took their cue from Branstad, who is seeking to end that practice in his budget proposal.

The legislation will now move to the House. More negotiation is expected before lawmakers reach a final resolution.

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