Utah lawmakers are shelving plans to hire a private company to handle Medicaid applications, following a report by researchers who say it likely wouldn’t save the state money or improve client services.
The idea isn’t dead. But efforts by the Utah Department of Workforce Services to remedy problems with the current system for determining who is eligible for the low-income health program show promise, said Sen. Allen Christensen, R-North Ogden. "I would like to give them at least another year before we talk privatization."
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In 2007, lawmakers consolidated applications for low-income health, food and welfare programs, transferring control of Medicaid eligibility to Workforce Services. Previously that task fell to the Department of Health.
The move was supposed to save up to $4 million. Instead, Medicaid error rates soared and eligibility determination costs doubled.
Those problems, however, can be blamed partly on poor timing, say political science professors hired by the state to explore privatization.
The merger happened on the eve of the recession, as Medicaid rolls swelled with the unemployed, and amid a $79 million overhaul of the state’s public aid case management system, said Roberta Herzberg, an associate political science professor at Utah State University.
With all that, and a steep learning curve, behind them, Workforce Services is now poised to reap the benefits of consolidation.
Since 2010, the agency has reduced its error rates even with sizeable cuts to staff, Herzberg said. "We do think consolidation is more convenient for clients. The one-stop shopping [for benefits] we think is a very big positive."
Southern Utah University assistant political science professor Ryan Yonk said with Medicaid, nothing in federal law bars Utah from outsourcing some eligibility duties to, say a call center. But that won’t fly with food stamps, which has more restrictive rules.
"There may be pieces [of Medicaid] that you could contract out," but disentangling the programs would yield "no large scale efficiency gain," he said.
Yonk said one improvement, though, would be for the state to create a steering committee to oversee eligibility and foster greater collaboration among health and workforce services officials.
Twitter: @kirstendstewart
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