The state announced it's paying an additional $344 million to two companies that run Iowa's Medicaid system.
Of that money, $103 million will come from Iowa taxpayers, the rest will come from the federal government.
"I think it's a big gut-punch to Iowa taxpayers," Senate Minority Leader Janet Petersen said.
A new agreement between the state and two private insurers means taxpayers will foot a $103 million increase to the state's $5 billion Medicaid program. Amerigroup of Iowa and UnitedHealthcare will continue to cover for the state's privatized health care system, which provides care to more than 600,000 Iowans.
"It really isn't like we're saying, 'Let's pay these companies more money,'" said Jerry Foxhoven, director of Iowa Department of Human Services. "We're saying, 'Let's pay the money that's necessary.'"
Iowa Department of Human Services Director Jerry Foxhoven, appointed by Gov. Kim Reyonlds, says the state needed the increase, in order to cover new claims -- a number of which, he says, have to do with mental health care.
"We have people sitting in beds that don't belong in in-patient beds," Foxhoven said. "This new system takes them out of that bed, and puts them into a community setting that provides a stepped-down level of care."
Foxhoven says this new care will free up beds, and save you money. But Democrats have their doubts."I'd like to see proof of how they're actually going to start paying providers on time and not delaying services and how they're going to cover for the hundreds of millions of dollars that the Republicans didn't put into the state budget," Petersen said.
Peterson describes the privatized system as an "utter mismanagement," and accusesReynolds of sneaking this budget increase in while state lawmakers are out of session.
"There's really no excuse for them not having these dollars in place," Petersen said.
But Foxhoven insists, the new increase is necessary.
"The governor was very firm about this: We don't just build a system, we have to fund it, too," Foxhoven said.
Candidate for governor, Fred Hubbell, provided KCCI a statement in response to news of the increased Medicaid funding.
It reads, in part: "Iowa taxpayers are paying hundreds of millions more than promised, and tens of thousands of Iowans have had their services denied or reduced. I'll work to reverse this Medicaid nightmare, and ensure Iowans have the care they deserve."