south-dakota guide to health insurance

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South Dakota health insurance exchange

3 carriers offer plans in SD exchange; no new carriers in 2015

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Obamacare has been quite successful in reducing the uninsured rate in states where Medicaid has been expanded under the ACA.  But in states like South Dakota where Medicaid has not been expanded, the reduction in the uninsured population has been much smaller.  In South Dakota, 15.88 percent of  the population was uninsured last year, and a recent study by WalletHub projected that number to fall only a little over one percentage point, to 14.71 percent in 2014.

The 2014 Obamacare open enrollment period ended in April, but enrollment in the South Dakota exchange has continued to grow due to qualifying events that trigger special enrollment windows.  HHS will release the updated enrollment numbers in November, and general open enrollment for 2015 will also begin in November. 13,104 people had enrolled in private plans in the South Dakota exchange by April 19, nearly doubling the number who had done so by March 1.  Of those enrollees, 11,000 selected plans from Avera, and Sanford enrolled 2,262 people and had another 500 applicants whose enrollment was pending because of unpaid premiums.  

An additional 3,850 applicants had enrolled in the state’s existing Medicaid program.  South Dakota has not expanded Medicaid under the ACA, although Governor Dennis Daugaard has twice submitted a proposal to HHS for a waiver that would allow the state to expand Medicaid to people with incomes up to 100% of poverty level, instead of 138% of poverty level.  HHS has rejected Daugaard’s proposals though, saying that expansion must extend to people with incomes between 100% and 138% of poverty level in order to be approved.  Because the state has not accepted federal funds to expand Medicaid, 26,000 South Dakota residents fall into the coverage gap – they earn too much money to qualify for Medicaid, but too little to qualify for subsidies in the exchange.

In 2014, three insurers are offering policies through the marketplace in South Dakota: Avera Health Plans, Sanford Health Plan, and DAKOTACARE. The three companies are offering a total of 38 options for individuals and families.  Wellmark Blue Cross and Blue Shield had contemplated joining the South Dakota marketplace for the 2015 open enrollment period, but ultimately announced in mid-June that they would continue to only offer off-exchange plans in 2015.  Although there will be no new carriers in the South Dakota exchange in 2015, the three existing carriers will offer a variety of plans, including some new HSA-qualified options from Avera and an Avera plan that gives insureds lower out-of-pocket costs if they use an Avera provider.

89 percent of South Dakota residents who enrolled in the exchange during the 2014 open enrollment period received a premium tax credit, and the average after-subsidy premium was $101 per month – a 73 percent reduction from the $372 per month average pre-subsidy premium.

On November 26, 2013 the state announced that it would allow carriers to extend existing policies per President Obama’s suggestion that non-compliant plans be allowed to remain in effect for one more year.  Sanford and DAKOTACARE both opted to allow existing policies to be renewed into 2014, giving insureds another option to compare with the new 2014 plans.

According to a report released by the U.S. Department of Health and Human Services (HHS), the average cost for a bronze plan —the lowest-cost option — in South Dakota is $298 a month in 2014. The national average for a bronze policy is $249 a month.  The lack of competition is one of the main reasons South Dakota’s premiums are higher than the nation average, but with Wellpoint Blue Cross Blue Shield adding their plans to the mix in 2015, premiums in South Dakota should skew closer to the national average next year.

During the first half of the 2014 open enrollment period (October 1 – December 24), the large majority of the enrollments in South Dakota were with Avera (1,889).  Sanford reported 629 enrollees by December 24, while DAKOTACARE – which is focusing more on the small group market – had fewer than 50 enrollees.  The carriers have not yet released total enrollment numbers for the second half of open enrollment.

Gov. Daugaard announced in late September 2012 that HHS would be running the state’s exchange, citing the high cost — estimated at $6.3 to $7.7 million — for ongoing operation of the exchange.

The state is not playing any role in promoting the new health insurance options or educating consumers about the marketplace. That decision leaves outreach efforts to the insurers and federally funded “navigators.” Navigators are affiliated with established community outreach and advocacy groups, and they are trained to help consumers understand and use the new online marketplace.

According to HHS, more than 92,000 South Dakotans (13 percent of the state population) are uninsured and eligible to use the marketplace.

Open enrollment for coverage in 2014 runs from Oct. 1, 2013 through March 31, 2014.

South Dakota health insurance exchange links

State Exchange Profile: South Dakota
The Henry J. Kaiser Family Foundation overview of South Dakota’s progress toward creating a state health insurance exchange.