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South Dakota health insurance marketplace 2022 guide

Two carriers offer 2022 health plans through the state's exchange; marketplace health plan rates decreased slightly for 2022

South Dakota exchange overview

South Dakota uses the federally run health insurance exchange – – for enrollment.  South Dakota has two carriers offering plans in the individual market in 2022, both of which offer plans statewide. More than 39,000 people enrolled in private individual-market plans through the South Dakota exchange during open enrollment for 2022 coverage.

Frequently asked questions about South Dakota's ACA marketplace

South Dakota uses the federally run exchange/marketplace, so residents enroll through

Former Gov. Dennis 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 ACA-compliant 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.

Western South Dakota Community Action Partnership received a $100,000 navigator grant in 2018, in 2019, and again in 2020 just as they did the year before. Navigator grants became much smaller than they had been in previous years, as the Trump administration reduced funding by about 84%. But the Biden administration boosted Navigator funding to record highs in 2021: Two Navigator organizations in South Dakota received a combined $1,450,000 in Navigator grants in 2021.

For 2022 coverage, plans are available in South Dakota’s exchange from the following insurers:

  • Avera
  • Sanford

When the exchanges debuted in 2014, three insurers — DakotaCare, Avera, and Sanford — offered plans the South Dakota exchange. All three offered their plans statewide.

Although there were no new carriers in the South Dakota exchange in 2015, the three existing carriers offered a variety of plans, including some new HSA-qualified options from Avera and an Avera plan that gave insureds lower out-of-pocket costs if they used an Avera provider.

Wellmark Blue Cross Blue Shield had 73% of the market share in South Dakota prior to the 2014 open enrollment period, but the insurance giant opted to stay out of the exchange in 2014, in 2015, and in 2016 (despite their lack of participation in the exchange, Wellmark said they sold more policies outside the exchange in South Dakota in 2014 than the two on-exchange carriers combined). After the end of 2016, Wellmark exited South Dakota’s ACA-compliant market altogether, and stopped selling even off-exchange plans.

As of 2016, DakotaCare switched to only offering plans outside the exchange. About 7,200 DakotaCare enrollees who had coverage through the exchange in 2015 needed to select a new plan from Avera or Sanford if they wished to continue to have coverage—and subsidies—through the exchange in 2016.

Celtic, Wellmark, and DakotaCare were offering plans outside the exchange in South Dakota as of 2016, but all three insurers opted to exit the ACA-compliant market in South Dakota at the end of 2016. The South Dakota Division of Insurance confirmed that Sanford and Avera were the only carriers offering individual market coverage in the state as of 2017, on or off-exchange.

So since 2016, Avera and Sanford have been the only insurers offering plans in the South Dakota exchange, but both insurers have offered coverage statewide each year.

The open enrollment period for 2022 coverage ran from November 1, 2021 to January 15, 2022. Outside of the annual open enrollment window, you’ll need a special enrollment period to enroll or make a change to your coverage. In most cases, special enrollment periods are tied to a qualifying life event, although some special enrollment periods (such as the enrollment opportunity for Native Americans, or for people earning under 150% of the poverty level) don’t require a specific life event. If you have questions about open enrollment, you can read more in our comprehensive guide to open enrollment.

According to SERFF, the following average rate changes wer approved for 2022 coverage offered by South Dakota’s marketplace insurers:

  • Avera: 0.7% average rate increase (SERFF filing AVER-132853374).
  • Sanford: 3.81% average rate decrease (SERFF filing SANF-132806360)

Avera had just over 20,000 enrollees in South Dakota’s individual market in 2020, while Sanford had just under 18,000. Across the two insurers, the weighted average rate change was a decrease of about 1.43% for 2022.

The South Dakota Division of Insurance doesn’t publicize information about rate filings until regulators have finalized the rates. But unlike some states, regulators in South Dakota do have the authority to reject rate filings that aren’t justified, or to require insurers to make adjustments to proposed rates. For 2022, the rates were approved as-filed.

Across the nearly 30,000 people who enrolled in plans through South Dakota’s exchange as of early 2021, the average full-price monthly premium was $694 (as described below, average full price premiums in South Dakota decreased slightly for 2022). But most enrollees — about 93% — were receiving premium subsidies that covered the majority of the cost; the subsidies averaged almost $622/month.

And that was before the American Rescue Plan (ARP) significantly boosted subsidies and made them more widely available. During the COVID/ARP special enrollment period that continued through mid-August 2021, there were 7,644 new enrollees in South Dakota. That was nearly three times the normal rate of enrollment during that timeframe (when a qualifying event would normally be needed; qualifying events were not necessary during the COVID/ARP special enrollment period). CMS announced that nationwide, nearly half of the new enrollees during the COVID/ARP special enrollment period were able to obtain coverage for under $10/month after subsidies were applied.

For perspective, here’s a look at how premiums have changed in South Dakota’s exchange in the early years of ACA implementation:

2015: 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 was $298 a month in 2014. The national average for a bronze policy was $249 a month in 2014. But the news was much better for 2015. A Commonwealth Fund analysis of average premiums across all metal levels for a 40-year-old non-smoker found an average premium decrease of 21% in South Dakota from 2014 to 2015. And an interactive map from the NY Times Upshot shows that in most areas of the state, people who switched from the 2014 benchmark (second-lowest-cost silver) plan to the new benchmark plan for 2015 were able to obtain premium decreases.

When we include both on and off-exchange plans and look at the entire individual market in South Dakota, the average premium increase for 2015 was 2%, as calculated by PricewaterhouseCooper.

2016: By 2016, only two insurers were offering plans in South Dakota’s exchange (that continues to be the case in 2019). Avera’s average rate increase was 14% and Sanford’s was 15%.

2017: Avera increased their average premiums by 38.15% for 2017, and Sanford increased theirs by an average of 36.34 percent. Since both carriers implemented very similar—and quite significant—rate increases, premium subsidies also grew sharply in South Dakota for 2017. HHS reported that the average benchmark plan (the second-lowest-cost silver plan in each area) premium would increase by 39 percent in South Dakota. Subsidies are tied to the cost of the benchmark plan, so they also had to increase to keep up with the higher prices in 2017.

2018: The average rate increase for Avera was 29%. For Sanford, it was about 16%. 2018 was the first year that cost-sharing reductions were not funded by the federal government, so the insurers added the cost of CSR to premiums for 2018. When the Trump administration announced in October 2017 that CSR funding would end immediately, South Dakota was one of the states that worked with CSM to allow insurers to use an emergency refiling process to submit new rates, with the cost of CSR added to premiums. In April 2017, a Kaiser Family Foundation analysis estimated that premiums for silver plans would have to rise by 16% in South Dakota (in addition to the rate increase that would otherwise apply) if CSRs weren’t funded.

The rate filings for South Dakota plans are available via SERFF. Avera’s revised filing (AVER-131179213) notes that “To keep the Silver rates lower than those for Gold plans, despite the additional load for the non-funding of CSR payments, Avera adjusted the profit and risk load.” They kept the profit and risk load the same as initially proposed for Gold, Bronze, Catastrophic, and off-exchange Silver plans. But they cut it almost in half for on-exchange silver plans. This is interesting, as it’s different from the approaches that insurers in most other states took. Insurers in most states simply added the cost of CSR to silver plans, and let the chips fall where they would. The result is that Gold plans in some areas of the country were cheaper than Silver plans, and Bronze (and sometimes Gold) plans were often free for enrollees who receive premium subsidies. But Avera’s approach helped to ensure that pricing would still “make sense” for their 2018 products, in terms of having the plans follow a least expensive to most expensive path as they move up from Bronze to Gold.

2019: The weighted average rate increase in South Dakota’s individual market was a little more than 5% for 2019.

2020: The approved rate changes for 2020 in South Dakota’s individual market amounted to an average increase of 6.5%.

2021: Avera had just under 20,000 enrollees in South Dakota’s individual market in 2020, while Sanford had just under 15,000. Overall, the weighted average rate increase for 2021 was just under 2.6%.

Enrollment in South Dakota’s exchange started out quite low in 2014, with just over 13,000 people enrolling. That was only an estimated 11.1% of South Dakota’s subsidy-eligible residents enrolled in coverage through the exchange – tying Iowa for the lowest percentage in the nation.

The fact that Wellmark did not participate in the exchange was cited as one of the reasons for the low enrollment in South Dakota’s exchange in 2014. The carrier’s huge market share and name recognition coupled with the fact that existing Wellmark members had no means of keeping their carrier and also obtaining subsidies, meant that enrollment lagged behind the rest of the country in South Dakota.

South Dakota’s percentage increase in exchange enrollments in 2016 was the ninth highest in the US, and the fourth highest of the states that use This could be due in part to the sharp rate increases for Wellmark’s off-exchange plans in 2016, which may have encouraged former Wellmark members to shop on the exchange instead.

Across all the states that use, the general trend thus far has been peak enrollment in 2016, with slight declines over the next few years and then an uptick in enrollment for 2021. But South Dakota is among just a handful of states where enrollment climbed steadily over each of the first five years of exchange operation. It did drop slightly in 2019, but has grown again in 2020, 2021, and 2022, reaching a new record high well before open enrollment ended for 2022 coverage.

Here’s a summary of how enrollment (during open enrollment) has changed each year in South Dakota’s exchange:

  • 2014: 13,104 people enrolled
  • 2015: 21,393 people enrolled
  • 2016: 25,999 people enrolled
  • 2017: 29,622 people enrolled
  • 2018: 29,652 people enrolled
  • 2019: 29,069 people enrolled (the first time enrollment dropped in SD’s exchange)
  • 2020: 29,331 people enrolled
  • 2021: 31,375 people enrolled
  • 2022: 39,292 people enrolled by December 15, with a month left in open enrollment

The increase in South Dakota’s exchange enrollment in 2017 was likely due in large part to the fact that Wellmark and DakotaCare both terminated their off-exchange plans in South Dakota at the end of 2016, and their enrollees had to seek coverage from Avera or Sanford instead, both of which offer plans on and off the exchange. There were ten states that saw enrollment growth in 2017, and South Dakota’s percentage increase in total enrollment was the second-highest.

Across all states that use, there was an average enrollment decline of 3.8% in 2019, so South Dakota’s enrollment drop that year was less significant than average. And enrollment in the state’s exchange increased in 2017, 2018, and 2020, despite the fact that average enrollment in states declined in each of those years. South Dakota was one of just a handful of states where enrollment increased from 2019 to 2020.

For 2022, the sharp enrollment growth was likely due to the extra premium subsidies created by the American Rescue Plan, which make coverage much more affordable through the end of 2022.

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As of October 2021, Farm Bureau is selling non-insurance plans in South Dakota

In February 2021, South Dakota Governor Kristi Noem signed S.B.87 into law, allowing Farm Bureau (or another agricultural organization domiciled in the state for at least 25 years) to sell health plans that don’t have to conform to state or federal insurance laws or regulations.

Under the terms of the legislation, the plans are not considered health insurance, so they are not regulated by the South Dakota Division of Insurance, the way health insurance policies are. Tennessee, Kansas, Iowa, and Indiana already allowed this type of plan to be sold; South Dakota and Texas joined them as of 2021.

South Dakota Farm Bureau rolled out the plans as of October 1, 2021, allowing any resident who is a member of the Farm Bureau to apply to coverage (membership in the South Dakota Farm Bureau costs $60 per year). Applications are accepted year-round, although they will use medical underwriting as a mechanism to keep costs down.

There are other cost-saving measures in place as well, which means that the plans are not as robust as ACA-compliant coverage. For example, the major medical plan offered by South Dakota Farm Bureau does not include maternity coverage if an individual enrolls alone. For family coverage, maternity benefits are only available after the plan has been in effect for nine months — as opposed to ACA-compliant plans, which provide maternity coverage immediately, for all enrollees.

(It’s noteworthy that in early 2021, after SB87 was enacted, South Dakota Farm Bureau said that their coverage would be “patterned after ACA plans and will provide coverage in all categories considered Essential Health Benefits under the ACA.” Maternity coverage is an essential health benefit under the ACA.)

To roll out the new plans, South Dakota Farm Bureau noted that they would partner with a third-party administrator, which would be licensed and regulated by the state. The plans use the UnitedHealthcare Choice Plus network.

South Dakota also enacted legislation in 2019 that allows association health plans to operate in the state. This aligns the state’s rules with federal regulations issued by the Trump administration in 2018, and the South Dakota bill had unanimous support in both chambers of the state’s legislature. The federal rules were soon struck down by a judge, however, preventing the expanded access to association health plans nationwide. The Trump administration appealed that decision, but the court stayed the appeal at the request of the Biden administration.

Insurance ballot initiative made headlines in 2014

South Dakota was in the national news in the fall of 2014 because of a ballot measure pertaining to health insurance networks that voters overwhelmingly approved in November. Amendment 17 was billed by supporters as “freedom to choose your doctor” but critics pointed out that it’s not as simple as proponents made it seem. Doctors and small or specialty hospitals were generally in favor of Amendment 17, while large insurers (including Sanford and Avera) and hospital networks were opposed. Ultimately, the measure passed 62 percent to 38 percent.

This does not mean that patients can choose any doctor they want though. Rather, it means that any doctor who is willing and able to comply with the terms and conditions of the health insurance carrier could enter the carrier’s network.

Because narrower networks have become commonplace over the last year, policy experts in other states were closely watching the outcome of the SD ballot initiative. A total of 27 states have “any willing provider” laws on their books, although only about half of them are as broad as South Dakota’s.

In the 2016 legislative session, a bill (HB1067) was introduced in an effort to roll back some of the provisions in Amendment 17, allowing carriers the option to offer both closed-network and open-network plans (plans with closed networks would be less expensive). The bill didn’t advance out of committee, and this article is a good summary of the controversy surrounding HB1067.

Grandmothered plans can renew

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, Wellmark and DakotaCare all opted to allow existing policies to be renewed into 2014, giving insureds another option to compare with the new ACA-compliant plans.

The state has continued to go along with additional federal extensions for grandmothered plans, most recently allowing these plans to remain in force until the end of 2022. But enrollment in grandmothered plans has dwindled, as people can no longer purchase them. In Sanford’s 2018 filing (SANF-131588434), the insurer indicated that 504 people were still enrolled in grandmothered Sanford plans as of 2018.

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.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Our state guides offer up-to-date information about ACA-compliant individual and family plans and marketplace enrollment; Medicaid expansion status and Medicaid eligibility; short-term health insurance regulations and short-term plan availability; and Medicare plan options.

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