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Medicaid gap population growing in South Dakota

Expanding health insurance for low-income families is on the ballot in November. Measure would increase the maximum income to qualify to 133 percent of the federal poverty level. That portion of the population grew between 2018 and 2020.

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People make their way into the South Dakota Capitol for the start of the 2014 legislative session Tuesday in Pierre. (Sean Ryan/The Republic)
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SIOUX FALLS, S.D. — The debate over expanding Medicaid focuses on a specific range of low-income adults without health insurance.

The number of South Dakotans who fit that definition increased to more than 35% from 2018 to 2020. The rate of increase, which jumped more than four percentage points in that time, was the third highest in the country, after Wyoming and Delaware.

The state’s voters are currently discussing whether or not to make Medicaid — the program that provides health insurance for low-income families — to include those who make less than 133% of the federal poverty level.

That portion of the population is commonly called the Medicaid gap. The question — Amendment D — will be on the election ballot on Nov. 8.

The statistics and acronyms can turn any discussion about Medicaid into a blizzard of numbers and babble.

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Here’s where the increase in uninsured South Dakotans over those three years can provide context for the debate.

The initiated measure is backed by a coalition of health care organizations, including the state’s three major hospital systems, as well as a number of advocacy groups.

Medicaid expansion is a key element of the Affordable Care Act passed in 2014, and further strengthened by the American Rescue Plan, pressed by the Biden Administration last year in the wake of the COVID pandemic.

Specifically, the current question is whether to include households with income between 100% and 133% of the federal poverty level. Because of how that rate is calculated by the federal government, the number is actually 138%, which explains why both numbers are used in different places.

For a single adult, the poverty level is $13,590, which means the top end of the spectrum for expanded Medicaid coverage is $18,754.

The number increases for each member of the household. For instance the top end for a family of four is $38,295.

The South Dakota Legislature has declined to expand Medicaid since the ACA — commonly known as Obamacare — was conceived. The argument being that there’s no guarantee that the federal government will follow through with its promise to fund a large portion of the bill.

South Dakotans Decide Healthcare, the coalition backing the ballot measure, says the Legislature is giving away money by not bringing those tax dollars back to the state.

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Just 12 states currently don’t provide expanded Medicaid coverage.

So, how many South Dakotans are we talking about?

About 42,500 people would be eligible, according to the Legislative Research Council.

That’s the group that grew from 31.3% to 35.4% in South Dakota, according to the analysis from Health and Human Services. Specifically, it's the percentage in that age group — 19 to 64 — who make less than 138% of the poverty level, who aren’t insured.

The data was part of a larger report that found the overall rate of uninsured in the United States dropped to 8% earlier this year, an all-time low.

“It's clear that too many hard working South Dakotans are falling through the cracks and finding themselves unable to afford health insurance coverage,” said Zach Marcus, campaign manager for South Dakotans Decide Healthcare.

“That's why it is so crucial we pass Amendment D in November. As many as 42,500 South Dakotans currently find themselves stuck in the coverage gap. Our hard-working friends and neighbors will be newly eligible for affordable coverage, and we'll bring $1.3 billion of our taxes dollars back to South Dakota to pay for it.”

The $1.3 billion comes from the Legislative Research Council. The state of South Dakota's cost to expand Medicaid to 133% of the federal poverty level is approximately $166 million. That cost is offset by predicted savings of about $162 million to the general fund and additional funding for two years from the American Rescue Plan. Taking the estimated savings into account, the state's cost is estimated at $3.8 million over five years, according to a fiscal analysis from the Legislative Research Council.

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It’s big money.

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S.D. Sen. Lee Schoenbeck, R-Watertown
Submitted

And to the opponents, a big risk.

“When this passes they will be sending emails about why we should be at 140%,” said state Sen. Lee Schoenbeck, R-Watertown.

As to the growth in the uninsured, Schoenbeck said there are consequences for decisions. There are jobs available for people who want to work and pull themselves out of poverty, he said.

“Life is a collection of decisions you make,” he said. “You can choose early in life to make decisions so you are employable and employed or you can choose to make decisions to keep you from being employable and employed.”

If the question is about compassion, the business and mission of the hospital systems is to provide that care. They are not-for-profit businesses that stand to take in millions of dollars of taxpayer money, Schoenbeck said.

“If part of their business is charity, and they are already doing the charity, why are you asking taxpayers to pay for that charity that is already your mission?”

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South Dakota state Rep. Greg Jamison, R-Sioux Falls
Contributed

The Legislature has fought Medicaid expansion since the inception of the Affordable Care Act, but at some point the needs and requests for help change the reality, said Rep. Greg Jamison, R-Sioux Falls.

“My guess is that the voters will approve it,” Jamison said. “I didn’t want to do it. There are good reasons to say no politically. But practically, after hearing all the explanations and requests, it seems like it’s time.”

The other shift in the debate is the Supreme Court’s decision to give the states authority to regulate abortion. Raising the bar to 138% will give low-income women access to health care they may not have otherwise, he said.

“There’s talk of finding ways to help those women through the pregnancy,” he said. “I think that makes sense, and most people can support to justify the reason for expansion.”

The change in the uninsured rates in South Dakota and surrounding states among adults ages 19-64, with incomes under 138% of the federal poverty level from 2018 to 2020. Year is when each state approved Medicaid expansion under the Affordable Care Act of 2014.
StateYear20182020Change
WyomingNA27.3%38.4%11.1%
South DakotaNA31.3%35.4%4.1%
Iowa201413.5%15.3%1.7%
Minnesota201411.9%13.6%1.6%
North Dakota201419.8%20.4%0.6%
Montana201617.1%16.5%-0.6%
Nebraska202027.9%25.2%-2.8%

Source: U.S. Department of Health and Human Services, Office of Health Policy

Correction: The state of South Dakota's cost to expand Medicaid to 133% of the federal poverty level is approximately $166 million. That cost is offset by predicted savings of about $162 million to the general fund and additional funding for two years from the American Rescue Plan. Taking the estimated savings into account, the state's cost is estimated at $3.8 million over five years, according to a fiscal analysis from the Legislative Research Council. This story has been updated

Patrick Lalley is the engagement editor and reporter for the Forum News Service in Sioux Falls. Reach him at plalley@forumcomm.com.
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