What is it, what does it cost, & who does it cover? Amendment D answers.

What does Medicaid Expansion even mean?

Amendment D, one of the two ballot initiatives coming to a vote in the November election, is a proposal to expand South Dakota’s Medicaid program. What is Medicaid, and what does it mean to expand it?

What is Medicaid?

Medicaid is the U.S. public healthcare system for those with low incomes. It pays most medical expenses for those who make less each year than the limit, which varies by state, as well as for some of those with disabilities.

Medicaid is NOT Medicare, which is the healthcare program for those over 65. However, those over 65 can still enroll in Medicaid if they are eligible.

The program is funded through a combination of federal and state dollars. Currently, the federal government must pay at least 50% of the costs of the program but pays more in poorer states (as measured by per-capita income). In South Dakota in 2021, the federal government paid 61.38%.

While the program is largely federally funded, it is administered and to some degree controlled by the states. Other than a mandatory baseline, states are able to decide what medical services Medicaid covers and who is eligible for the program.

According to the Medicaid website, some of these baseline services include ambulance rides, emergency room treatment, hospital services, laboratory work, x-rays, and family planning services.

Most states, including South Dakota, cover other services, such as prescription drugs, under Medicaid as well.

South Dakota Medicaid

According to the Department of Social Services, South Dakota currently has 16 Medicaid programs, each of which covers different groups of people, including:

  • Children (Income-capped)
  • Disabled Children (Not income-capped)
  • Pregnant women
  • Workers with disabilities
  • Developmentally disabled
  • Those in nursing homes, assisted living facilities
  • Quadriplegics
  • Refugees
  • Low-income families (families without children are not included)
  • Certain newborns
  • Those with breast and cervical cancer
  • Those with Down Syndrome, autism, or cerebral palsy
  • Those in adult foster care
  • Those with Chronic Renal Disease
  • Elders who would be in nursing homes if not for help at home
  • Youth formerly in foster care

Those not covered include:

  • Individuals or couples without children or disabilities who do not fall into a category above, regardless of income.

In summary, South Dakota currently provides Medicaid coverage to low-income families with children, low-income pregnant women, the disabled, and those with especially difficult circumstances, such as breast cancer.

The state currently does not provide medical coverage to families without children or to low-income men or women without children, unless they fall into one of those special categories mentioned above. Amendment D would provide medical coverage to anyone who meets the income guidelines regardless of familial status or ability to work.

South Dakota State Senator David Johnson said: “The only people who are going to be held accountable are the people of the State of South Dakota. And that’s you and me and that’s your tax dollars, if that’s where you want it to go. I just find that hard to believe that the State of South Dakota, the people of South Dakota are interested in paying for health coverage for these able-bodied citizens that will be affected by an expansion of Medicaid.”

Zach Marcus, campaign manager for South Dakotans Decide Healthcare said: “What Amendment D will do is take $328 million every year that currently we already pay which go to all the other states that have already accepted these dollars. We’re saying let’s keep that $328 million in South Dakota and use it to make sure hard-working South Dakotans are able to access affordable healthcare coverage.”

What is Medicaid Expansion?

As part of the Affordable Care Act (ACA), popularly known as Obamacare, states are authorized to expand coverage for Medicaid to everyone under the age of 65 whose income falls under 138% of the Federal Poverty Line. This is optional, and states cannot be forced to implement this expansion.

Currently, the ACA requires the federal government to pay 90% of cost of the expansion. Additionally, a provision of the American Rescue Plan provides additional funding for the first 2 years after a state implements the expansion.

38 states and Washington DC have implemented this expansion. 12 states, including South Dakota, Wyoming, and Wisconsin, have not.

Sen. Johnson said, “There’s been a lot of debate on the efficacy of the Affordable Care Act. . . As I understand, the people who have benefited from it the most are the people who need it the least. In other words, the elderly, those living below the poverty line have not benefited from the Affordable Care Act as much as the people who can afford to have insurance in the first place.”

Marcus said, “There are certain populations of people under the 100% of the poverty line who will be covered, but generally speaking, we’re talking about people who make between 100% of the poverty line and 138% of the poverty line. If you make that amount of money right now, you make too much to qualify for Medicaid normally, but also don’t make enough money to actually afford insurance. It’s the people stuck in this gap.”

Amendment D: South Dakota Medicaid Expansion

Amendment, not a statute.

The proposed measure is a constitutional amendment, meaning that the text of the measure will be inserted in the South Dakota State Constitution rather than implemented as a statute. The effects of this are twofold:

First, it cannot be altered by a simple act of the state legislature. It can only be changed by another ballot initiative, or by the legislature calling a constitutional convention, which can only be done with a 75% vote of both the House and the Senate.

Second, twice as many signatures were required to get on the ballot. Normal initiatives require signatures equal to 5% of the votes in the previous election for governor. This initiative required 10%.

10 constitutional amendments have been put to a public vote since 2006, according to data from the South Dakota Secretary of State.

Sen. Johnson believes, “You have a legislature of 105 legislators who are elected by the people and it is the job of that legislature to come up with answers to our state problems. Bringing it before the Constitution is a serious flaw, in my opinion. It should be brought up at each and every election by voting. This type of a measure does not belong in the Constitution.”

Marcus said, “The bottom line is that the members of South Dakotans Decide Healthcare wanted to be as sure as we possibly could that the voters of South Dakota will receive what they vote for, and felt that a constitutional amendment was the best way to ensure that that happens.”

What does it do?

According to the text of the initiative, the amendment would expand Medicaid coverage to include everyone under 65 that has an income under 138% of the Federal Poverty Line, or about $19,000/year for an individual in 2022.

In South Dakota, this would include approximately 42,500 people, according to the South Dakota Legislative Research Council.

It would require the state to provide these people with coverage that meets or exceeds the federal benchmark requirements. According to the Medicaid website, some of these bare-minimum services include ambulance rides, emergency room treatment, hospital services, laboratory work and x-rays, and family planning services.

It specifies that the state cannot place any restrictions on the newly covered individuals that it does not place on other Medicaid recipients.

To fund this, it would require that the state take all required actions to receive the maximum amount of federal assistance allowed.

What does it cost?

South Dakota law requires proposed amendments to include a fiscal note from the Legislative Research Council which analyzes costs and savings for the state.

Their analysis concluded the following:

  • Over a 5-year period, the total cost would be approximately $1.5 billion dollars. Under current law, 90% would be paid by the federal government. For the first 2 years, additional federal funds would be provided as an incentive to participate in the expansion.
  • Over a 5-year period, the total cost to South Dakota would be around $166 million.
  • However, over a 5-year period, South Dakota would also save about $162 million from an offset in funds for correctional healthcare, behavioral healthcare, and Indian Health Services, as well as the movement of certain populations from the regular Medicaid group to the expansion group.
  • This brings the net 5-year cost to the state to about $4 million, according to the LRC.

However, this also includes the American Rescue Plan’s 2-year federal incentive, which provides additional federal funding for the first two years.

After the first two years, the annual cost to the state is approximately $22 million, according to the LRC data. This is approximately 1.1% of the total state General Fund spending in 2022.

Some have expressed concern that changes to federal law may change these calculations. Sen. Johnson says, “My concern is that at any point when the federal government says, ‘We’re no longer going to support this, we have now an expanded number of recipients of Medicaid that now the State of South Dakota has to pay for without any federal assistance. That’s always a risk that we take when you’re dealing hand in hand with the federal government.”

The Yes on Amendment D campaign does not think this is likely to happen. According to Marcus,  “It’s very unlikely that that will ever happen. Thirty-eight states have already done this. That’s 38 states worth of legislators who really don’t want that to happen.”


Categories: Local News, Politics & Elections, South Dakota News