DES MOINES, Iowa (AP) — 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.

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.