Within a few months, Iowans on Medicaid should once again have a choice of management companies to oversee their benefits, top administrators told legislators Monday.

Iowans coming on to Medicaid now have just one choice of management companies, UnitedHealthcare. The situation violates one of the fundamental selling points of Iowa’s controversial decision to have a privately run Medicaid system: Members were supposed to choose from managed care organizations that competed for their business by providing good service.

Iowa's largest Medicaid management company, AmeriHealth Caritas, abruptly pulled out effective Dec. 1, because of a contract dispute with state officials. The third company serving Iowa’s Medicaid program, Amerigroup, told state officials that it couldn’t take any of AmeriHealth’s 215,000 former customers, because it had its hands full with the 200,000 Iowans it already had on its rolls.

Iowa’s new Medicaid director, Michael Randol, acknowledged Monday the lack of competition is a serious problem.

“Choice is a key part of managed care,” he told legislators on a committee overseeing the system. “In the future, members will once again have the choice of MCO’s, which ones they’d like to choose.”

Randol, who previously was Kansas’ Medicaid director, said he expects federal officials to file a formal order to Iowa to fix the lack of competition in its program. He said Iowa will comply by helping Amerigroup prepare to accept new members, and by seeking a third Medicaid management company to enter Iowa’s market in 2019.

Randol’s boss, Department of Human Services Director Jerry Foxhoven, told legislators he hopes Amerigroup will be able to take on new Iowa Medicaid members by March of 2018. In the meantime, 10,000 former AmeriHealth members who tried to switch to Amerigroup will temporarily have their health benefits overseen directly by the state.

Amerigroup’s Iowa leader, Cynthia MacDonald, told legislators her company is in the process of adding staff members to expand its Iowa program. MacDonald also batted down rumors that Amerigroup intends to follow AmeriHealth in bailing out of the Iowa Medicaid system.

“It’s not true,” she said, after Rep. John Forbes, D-Urbandale, mentioned the rumor.

About 560,000 poor or disabled Iowans are covered by the Medicaid managed care companies, who are paid set amounts of federal and state tax money per member to oversee health-care benefits. Former Gov. Terry Branstad, a Republican, made the controversial decision to hire the companies to run the program, starting last year.

State administrators and leaders of UnitedHealthcare and AmeriHealth told legislators Monday that they continue to see private Medicaid management as a path to improving Iowans’ health in an economical way. But they heard significant skepticism from legislators of both parties, who said they continue to receive complaints from Iowans whose services have been cut and from care providers whose bills have gone unpaid.

Rep. Rob Taylor, R-West Des Moines, pushed back Monday after hearing a UnitedHealthcare executive describe problems in the system as “some bumps.”

“Those bumps are people,” he told the executive, Kim Foltz. “Those bumps are patients that are not receiving the services they were promised, or the providers that are providing those services and are not being paid.”

Foltz told Taylor her company has an interest in ensuring members receive proper care, so they don’t get sicker and wind up in the hospital.

“We are absolutely committed to their needs being met,” she said.

Taylor replied: “I want to make it crystal clear that there’s a disconnect somewhere between me, these people and you."

Sen. Liz Mathis, a Robins Democrat and a leading critic of privatized Medicaid, said there is growing support in the Legislature to at least take some of the most vulnerable Iowans out of managed care and resume having state administrators directly oversee their benefits.

“We need to start making some changes here,” she told colleagues on the oversight panel.

Gov. Kim Reynolds, a Republican who succeeded Branstad, told reporters recently she has no intention of reversing course, although she acknowledged the shift to privately run Medicaid is "not perfect."