Lang
3/18/26
State Auditor Rob Sand on Wednesday released information showing Iowa’s Managed Care Organizations (MCOs) are on track to receive a nearly 90% increase in funding to manage Iowa’s Medicaid program in FY26. That’s despite approximately 6,300 fewer Iowans using the program the previous year. The estimated $135.5 million increase amounts to an additional $329 per Medicaid member.
The non-partisan Legislative Services Agency estimates the Medicaid program will see a $90.6 million deficit this fiscal year, followed by a $167.6 million deficit in FY27. To bridge the gap, the legislature is considering a measure that would retroactively increase taxes on Health Maintenance Organizations (HMOs). Critics, including business and taxpayer relief organizations, are concerned that the tax will be passed on to the vast majority of Iowans who receive healthcare insurance through their employer or purchase it on the open market.
In a statement released by Sand’s office, he says, “It doesn’t make sense. The state is paying three private insurers tens of millions more to manage a program that taxpayers already foot the bill for, even though enrollment has declined significantly over the last few years.”
Sand, who is also running as a Democratic candidate for governor, added that the current administration’s budget practices have Medicaid operating at a deficit.