Iowa Policy Points

Of course the $33 million matters, Governor

It seems no Governor Branstad costume is complete without rose-colored glasses, even after Halloween.

For on the final day of October, as goblins prepared to venture out to neighbors’ houses for treats, the Governor offered news on his unilateral decision to privatize Medicaid: It will cost the state an extra $33 million this fiscal year, payments to private companies not previously anticipated.

But he’s telling us not to worry about that spending. For example, the Des Moines Register story prominently noted reassurances from the Governor and his chief of staff, Michael Bousselot:

But the situation will not negatively impact the state budget because Medicaid cost savings will exceed $140 million when compared to the old Medicaid program, they said.

 

Hmmm. So, we’re going to spend $33 million more — $33 million we weren’t planning to spend — and that doesn’t “negatively impact” the state budget?

That is not what we’re told when it’s $33 million for schools, or cracking down on polluters or businesses that deliberately stiff their employees for wages owed. For those things, we just don’t have the money.

Think of it this way: Last month, the Revenue Estimating Conference projected that the state would take in $72 million less in FY2017 than it had estimated in March. That means those funds will not be coming in and may affect what can be spent. Now, we learn of an extra $33 million charge. Already, some $100 million less for the current year.

Of course the $33 million matters. There is an impact on the budget bottom line, and it is disingenuous to suggest otherwise.

Budget projections are always a difficult thing. But from the start of the Governor’s decision to privatize Medicaid, without legislative consent, we have been asked to accept optimistic assessments of what to expect. And if the optimism is misplaced? Education funding and other general-fund priorities inevitably lose.

Medicaid privatization already has scared a fair number of Iowans about their access to health care. Those fears are not resolved. Neither are concerns about the fiscal side of this issue.

Posted by Mike Owen, Executive Director of the Iowa Policy Project
mikeowen@iowapolicyproject.org