September 11, 2024  – Iowa has once again awarded Centene with a Medicaid managed care contract, solidifying the company’s role in the state’s Medicaid program. The contract ensures Centene’s subsidiary, Iowa Total Care, continues to serve Iowa’s Medicaid beneficiaries for six more years. 

The renewal was announced last week, aligning Centene’s contract expiration with those of other key players in the state’s Medicaid system, Elevance and Molina. All the Iowa Medicaid managed care contracts are set to conclude in 2031. The state’s goal with this was to standardize the Medicaid contract timeline across the board.

Centene’s Iowa Total Care has become a big part of administering Iowa’s insurance program, which caters to approximately 720,000 individuals under Medicaid and the Children’s Health Insurance Program. With the state’s annual Medicaid expenditure reaching $6.7 billion, managed care organizations are essential to keep costs under control. In the 2023 fiscal year alone, Centene covered approximately one-third of the population and received about $2.8 billion.  However, they have taken in nearly $9.5 billion since its initial contract in 2019.

Iowa adopted the Medicaid managed care model in 2016, a move that sparked significant debate. Critics argued that shifting to a for-profit model could hinder healthcare access. Despite these concerns, contracting with private insurers has become a widespread Medicaid delivery method across the United States.

The state’s decision to continue with managed care reflects a broader national trend, albeit not without controversy. Iowa’s journey with managed care has seen its challenges, with exits by AmeriHealth Caritas in 2017 and UnitedHealthcare in 2019. Both health plans cited unsustainable financial losses. 

Despite these losses, the state remains committed to this model, evidenced by the steady administration of its Medicaid contracts and ongoing adjustments to improve the system. Iowa received five bids for Medicaid contracts upon submitting an RFP in 2022, and awarded additional awards to Molina and Elevance.