SD task force finishes Medicaid expansion study

SD task force identifies advantages and disadvantages of expanding state's Medicaid program

Associated Press

PIERRE, S.D. (AP) -- An expansion of South Dakota's Medicaid program would improve health care for thousands of low-income people and could boost the state economy, but it also could put a strain on medical providers and increase state spending, a task force decided Tuesday.

The task force, appointed by Gov. Dennis Daugaard to study the issue, was set up to identify the advantages and disadvantages of expanding Medicaid. After some last-minute changes are made to its approximately 40-page draft report, the task force findings will be used by Daugaard and the South Dakota Legislature as they decide whether to expand the state-federal program that provides health care for low income people.

Task Force Chair Deb Bowman, a senior aide to the governor, said the 29 members of the panel did a good job of studying the issue without allowing their personal opinions to interfere during a series of four meetings over the past five months.

"I think overall the governor and the Legislature will get a report that accurately reflects what transpired in these meetings and have a good idea of what the decision points are as it relates to Medicaid expansion," Bowman said.

The federal health care overhaul seeks to provide more people with health insurance through subsidized private insurance offered through online marketplaces called exchanges. Stated also have the option of expanding Medicaid to cover people considered too poor to get the subsidized insurance.

South Dakota's Medicaid program now covers about 116,000 children, adults and disabled people. The expanded eligibility would add an estimated 48,500 people, mostly adults without children.

People earning up to 138 percent of the federal poverty level — $15,451 for a single person or $31,809 for a family of four — would be covered by an expansion. The federal government would fully cover spending on the extra people through 2016, and the state's contribution would rise in stages to 10 percent of the medical costs by 2020.

The task force estimates that if Medicaid is expanded, the state would pay about $102 million through 2020 as its share of covering additional patients and administering the expanded program. The federal government would spend an extra $2.1 billion in South Dakota for an expanded program from 2014 through 2020.

The Legislature earlier this year agreed with the governor's recommendation to delay a decision on expanding Medicaid after Daugaard said he is uncertain whether the federal government will be able to meet its pledge of paying most of the costs of expanding Medicaid.

The task force recommended that if Daugaard and the Legislature approve an expansion, they should include a provision that ends the expansion if the federal government fails to pay its full 90 percent share of the costs after 2020.

However, Dave Hewett, president of the South Dakota Association of Healthcare Organizations, noted at Tuesday's meeting that the state's share of spending would a small part of the overall cost of expanding the program.

The task force's draft report found that expanding Medicaid could mean newly covered people seek preventive care earlier instead of waiting until they are very ill and get more expensive care in hospital emergency rooms. An expansion also could reduce deaths.

The additional spending on medical services also could boost the state economy.

However, an additional 48,500 Medicaid recipients could strain a health care system that already has a shortage of primary care doctors, nurses and others, particularly in rural areas, the report said.

"How can we in any way possibly say there's not going to be a shortage if we have a shortage now," Bowman said.

Hospital officials said they have already pledged they will be able to care for the additional patients, but officials said dentists and mental health providers will have trouble caring for the added Medicaid patients.

The report also said even though the federal government would pay most of the cost of expanding Medicaid, additional state tax dollars would also be needed.

But Sen. Billie Sutton, D-Burke, said South Dakotans will pay federal income taxes to support the national health care overhaul even if the state does not expand Medicaid.

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Follow Chet Brokaw on Twitter at http://www.twitter.com/chetbrokaw

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