September 29, 2022

Expanding Medicaid to include adults between the ages of 18 and 65 will give workers without employer-provided insurance, or the financial resources to purchase insurance, a way to seek medical services and help keep them in the workforce.  

People without insurance often ignore health issues until they become health emergencies that are treated in the emergency room.  This creates two issues, the cost of uncompensated services being shifted, in part, to insurance companies; and people who are too sick to return to work. 

The South Dakota Chamber of Commerce and Industry has concluded that expanding Medicaid will add to workforce stability and help keep people in the workforce.  “The fact is that the marketplace created by the Affordable Care Act (ACA/Obama Care) has not offered insurance at a cost that is affordable to low-income workers,” commented David Owen, President of the Chamber.  Owen continued, “Amendment D not only adds insurance options for low-income workers, it is paid for by more than $300 million dollars of tax money paid by South Dakota citizens that will otherwise not be available to solve problems right here in our state.”

To review the analysis of Amendment D that was presented to the Board of Directors – Click Here

To view a 23-minute recorded Zoom conversation that Chamber President David Owen had with Senator Steinhauer (R-District 9), an advocate and leading analyst of Amendment D – Click Here

During the meeting of the Board of Directors, there was a discussion about the impact that expanding Medicaid will have on the workforce.  There is a concern that with the offer of free health insurance, people might avoid working, or make sure they don’t exceed the poverty level to qualify for Medicaid insurance.

This would require someone to intentionally impoverish themselves by living with less than $18,754 income, or a family of four people staying below an income $38,295 dollars.  It is possible for someone to be intentionally impoverished to secure health insurance, but that assumption must include the reality that they have severe enough health issues that they would be unlikely to hold a job for long periods of time.

The South Dakota Chamber of Commerce and Industry believes that expanding Medicaid will have a positive impact on helping people in low wage jobs secure healthcare services and remain in the workforce as healthier people.

Here are some of the questions that were part of the Board review of Amendment D (taken from the analysis paper).

 

What does Amendment D do?

Here is the Attorney General’s Ballot Explanation which will be on the ballot when people vote:

Title: An initiated amendment to the South Dakota Constitution expanding Medicaid eligibility.

Explanation: Medicaid is a program, funded by the State and the federal government, to provide medical coverage for low-income people who are in certain designated categories. This constitutional amendment expands Medicaid eligibility in South Dakota. It requires the State to provide Medicaid benefits to any person over age 18 and under 65 whose income is at or below 133% of the federal poverty level, plus 5% of the federal poverty level for the applicable family size, as provided in federal law. For people who qualify under this amendment, the State may not impose burdens or restrictions that are greater than those imposed on any other person eligible for Medicaid benefits under South Dakota law.

The South Dakota Department of Social Services must submit to the federal government all documentation required to implement this amendment, and must take all actions necessary to maximize federal funding for this expansion.

 

How much is this expansion going to cost?

First, the FMAP, or Federal Medical Assistance Percentage, for the expanded population is different than the FMAP for the current Medicaid program.  As mentioned above, the financial incentive that is offered to the states to expand Medicaid is an FMAP split that is 90/10; in other words, the federal government pays 90% of the cost for those added to the Medicaid roles and the state will pay 10%.  Plus, there is a bonus provided for the first two years that adds to the federal government payments that will actually over pay for benefits.  Here is the conclusion of the Legislative Research Council for the costs to the state budget for the first five years of Medicaid being expanded.

Total state cost over 1^st five years: $3.8 million

Source: Legislative Research Council

 

Why is Amendment D being put in the constitution rather than being an initiated measure that would put it in statute so the legislature can control it?

There have been several states that used the initiative process to put Medicaid expansion into law.  The reaction from legislatures has been to refuse to fund the program or to delay implementation for years and years.  South Dakota has a history of legislatures changing or outright repealing initiatives passed on the ballot.  Proponents did not want to risk a hostile legislature taking away a program, should it pass by a vote of the people.

 

Why does it make sense to offer government insurance to people that are working and other able-bodied adults?

As noted above, this is seen by proponents as both a workforce issue and a cost of insurance issue.

An estimated 60% of those in the population that will get coverage after South Dakota expands Medicaid are people in the workforce and employed by companies that don’t offer health insurance.  A worker who has medical coverage with access to early treatment for a minor illness – which can prevent serious illness – does several things.  It allows them to keep working and avoids the most expensive treatments in the form of emergency room visits for much more serious illnesses.  The uninsured cannot pay for these services so those costs get written off by healthcare providers and shifted to insurance companies when policies are renewed. 

Conclusion:  Amendment D will help people working for entry level wages, and for companies that do not offer health insurance, a way to have insurance and receive healthcare.  This will help more people stay in the workforce.

The costs to the state for the first five years are less than $5 million and if the state is wise, they will revisit SB 102 from last session that would take the over payment from the first five years and put it into a fund to pay the costs of expanded Medicaid for years after the initial incentives end.

There is more than $300 million dollars that will be used for medical care in South Dakota if Amendment D passes and those funds will go to other states if Amendment D fails.  South Dakota citizens pay that money to the federal government; it will do more good if it is spent in South Dakota.  Healthcare has become as vital to South Dakota’s economy as highways and farm payments.  These are partnerships with the Federal government that benefit South Dakota.

Medicaid has been a partnership with South Dakota since 1965 and it is time to expand that partnership in South Dakota. 

Vote YES on Amendment D