An official says Iowa will utilize a range of options to address an additional $60 million it plans to spend for private insurance companies to keep running its Medicaid program.

Iowa Department of Human Services spokesman Matt Highland says the agency will pay the insurance companies nearly $20 million directly for so-called capitation rates that are distributed on behalf of each Medicaid patient. The remaining money will come by carving out some drug expenses and finding internal cost savings.

Highland says the breakdown is important context in understanding how Iowa will contribute an extra $60 million as part of new state contracts with two private insurance companies. The federal government will pay about $80 million, for a total of $140 million.

Highland says some money may go to a third company for work it's done since July. The company is leaving the state at the end of November. It has announced it plans to lay off 400 employees.

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An Iowa official says the state will spend an additional $60 million this budget year for private insurance companies to keep running the Medicaid program.

Iowa Department of Human Services spokesman Matt Highland said Thursday that additional costs announced this week as part of new state contracts with two companies will total $140.4 million. The state will pay $60.8 million of that. The federal government will pay about $80 million.

Highland didn't immediately respond to additional questions by email and phone.

The agency announced a 3.3 percent increase in costs at a Tuesday press conference but didn't specify a dollar amount. It was on the same day that AmeriHealth Caritas, one of three private insurance companies overseeing Medicaid in Iowa since 2016, announced it would pull out after failed negotiations over a new contract.

The nonpartisan Legislative Services Agency says DHS has surplus money from a previous budget year that's expected to help cover the costs.