South Dakota health insurance
A look at health insurance and the effect of Obamacare in 'The Rushmore State'
By Louise Norris
August 12, 2014
Public health and a state’s approach to healthcare reform are significant factors that play a role in quality of life, productivity, and health outcomes. Each state has different strengths and challenges when it comes to healthcare, and healthcare reform has been a very polarizing topic for the last few years, with some states fully embracing it and others rejecting it in every way possible.
Here’s a summary of how South Dakota compares with other states in terms of overall health, access to health insurance, and the state’s approach to healthcare reform:
South Dakota health ratings
In 2014, South Dakota was ranked 12th (the same spot the state held in 2009) out of the 50 states and the District of Columbia by the Commonwealth Fund’s Scorecard on State Health System Performance. South Dakota’s Scorecard provides specific details about public health in the state and how the overall score was determined.
America’s Health Rankings placed South Dakota a little lower, rating it 22nd out of the 50 states in 2013 in terms of overall health. The state’s rating is helped by low incidence of drug deaths and air pollution, and relatively good overall physical and mental health. But it’s lowered by factors that include a high incidence of binge drinking and tobacco use, and low immunization rates.
Trust for America’s Health gives us another look at overall public health in South Dakota in their 2014 listing of Key Health Data About South Dakota. Their summary includes information on the prevalence of various illnesses and health outcome predictors.
If you’re interested in seeing how the counties in South Dakota compare with one another in terms of health factors and outcomes, the Robert Wood Johnson Foundation has put together this interactive map that you can use.
South Dakota and the ACA
In 2010, South Dakota’s U.S. Senators were split on the ACA. Democrat Tim Johnson voted yes, while Republican John Thune voted no. In the U.S. House, Stephanie Herseth Sandlin, a Democrat, voted yes. Johnson and Thune are still in the Senate, and although Johnson is not seeking re-election in 2014, he continues to make Medicaid expansion a priority as he closes out his final term. Kristi Noem is the new U.S. Representative for South Dakota, and she opposes the ACA.
Governor Dennis Daugaard is opposed to the ACA, and opted to let HHS run the state’s exchange. But he has been willing to negotiate on the issue of Medicaid expansion, proposing a compromise to cover only residents with incomes below the poverty level, rather than those with incomes up to 138 percent of poverty as called for under the ACA. HHS has not approved his proposal, and South Dakota has not yet expanded Medicaid. South Dakota’s state legislature has a strong Republican majority, generally opposed to Obamacare.
How did the ACA help South Dakotans?
Before the ACA was implemented, the uninsured rate in South Dakota was 14 percent, lower than the national average. Post-ACA, 11.3 percent of South Dakota residents were uninsured at the end of June – six months after full Obamacare implementation. This puts South Dakota ahead of 35 other states in terms of the percentage of the population without health insurance, but the number could still be reduced considerably if and when the state expands Medicaid.
South Dakota enrollment in QHPs
In late 2013, the Kaiser Family Foundation estimated that 118,000 South Dakota residents were potential exchange customers, and that about 70,000 of them would qualify for premium subsidies. By April 19, at the end of the first open enrollment period, 13,104 people had finalized their enrollment in the South Dakota exchange, 89 percent of them qualifying for premium subsidies.
Three carriers offer policies in the South Dakota exchange: Avera Health Plan, DAKOTACARE, and Sanford Health Plans. Wellmark Blue Cross Blue Shield had considered participating in the exchange in 2015, but ultimately decided to continue to sell plans only off-exchange during the upcoming open enrollment period.
South Dakota Medicaid/CHIP enrollment
South Dakota is currently one of 22 states that has not expanded Medicaid under the ACA and has no imminent plans to do so. The state had tried to reach a compromise with HHS earlier this year, but the two sides were not able to agree on an acceptable path to Medicaid expansion, and the process has stalled. Governor Daugaard and Republicans in the South Dakota legislature had proposed expanding Medicaid, but only up to 100 percent of poverty, rather than 138 percent as called for in the ACA.
The Supreme Court ruled in 2012 that Medicaid expansion was optional for the states. But the catch is that subsidies in the exchange are only available for people with incomes between 100 percent and 400 percent of poverty. Below that range, federal lawmakers had anticipated Medicaid coverage for everyone.
Unfortunately, in states like South Dakota that have not expanded Medicaid, coverage is only available based on the pre-ACA eligibility rules. (For South Dakota, there’s no Medicaid coverage available for non-disabled childless adults, and parents with dependent children are only eligible if they have a household income that doesn’t exceed 58 percent of poverty.)
Because South Dakota hasn’t yet expanded Medicaid, 25,480 people – about 29 percent of the state’s uninsured population – are in the coverage gap, with no access to Medicaid OR exchange subsidies. Their only option is to pay full price for a private plan, which is not possible for most households with incomes below the poverty level.
Governor Daugaard’s proposal would have provided Medicaid to people currently in the coverage gap – everyone with incomes up to 100 percent of poverty level – but would have kept the current system of exchange subsidies for people with incomes between 100 percent and 138 percent of poverty level (about 22,000 people in South Dakota). Medicaid is less expensive for the federal government than exchange subsidies, but exchange subsidies don’t cost the states anything, while the states will eventually be on the hook for up to 10 percent of the total cost of Medicaid expansion. Ultimately, no compromise was reached, and the coverage gap continues to exist in South Dakota.
The South Dakota exchange still enrolled 3,850 people in existing Medicaid by mid-April, all of them qualifying under the existing eligibility rules.
South Dakota and high-risk pools
Before the ACA reformed the individual health insurance market, coverage was underwritten in nearly every state, including South Dakota. This meant that pre-existing conditions could result in an application being rejected altogether, or a coverage offer with significantly higher premiums or policy exclusions. The South Dakota Risk Pool was created in 2003 to give people an alternative if they couldn’t purchase individual health insurance because of their medical history.
Implementation of the ACA and the switch to a guaranteed issue individual market made high-risk pools largely unnecessary starting in January 2014, and the South Dakota Risk Pool stopped enrolling new members as of December 31, 2013. But the plan will remain operational for existing members until June 30, 2015. The administrators are encouraging current enrollees to check out their options in the exchange during the upcoming open enrollment period though, as they may be able to find better coverage and/or qualify for subsidies to offset the cost if they shop in the exchange.
SD state-based health reform legislation
South Dakota’s legislature tackled a few different healthcare issues in 2014, including passing a bill that calls on the federal government to repeal or defund the ACA. Here’s a summary of recent South Dakota bills related to healthcare reform: