DES MOINES, Iowa (AP) — The Iowa Department of Human Services says it has agreed to pay an additional $386 million to two insurance companies that will provide Medicaid services for the 2020 fiscal year.
The 8.6% increase announced Wednesday will include $115 million in additional state funding, with the federal government paying for the remaining portion.
The $5 billion Medicaid program serves about 600,000 poor and disabled people.
DHS says the rates include changes made by the Iowa Legislature, which account for about 2 percent of the increase.
Last year the agency approved a $344 million increase over the previous year.
The state privatized the Medicaid program in 2016 with then-Gov. Terry Branstad promising cost savings and improved care. Democrats say neither goal has been accomplished amid turmoil that included two insurers dropping out and last month’s sudden resignation of DHS Director Jerry Foxhoven.