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South Dakota health insurance

One of just a few states where enrollment in the exchange has grown every year since 2014

In South Dakota, a state with conservative leanings, the Affordable Care Act took awhile to pick up enrollment momentum. In 2016, South Dakota was the state with the ninth highest exchange enrollment increase over 2015 – and the fourth highest of those using HealthCare.gov.

Leading up to open enrollment for 2017 coverage, Wellmark Blue Cross Blue Shield announced that it would cease to offer individual plans in South Dakota, leaving just two carriers remaining and state officials concerned about the effect on consumers. But enrollment climbed significantly in 2017, despite the fact that it dropped in most states that use HealthCare.gov.

Again for 2018, exchange enrollment grew slightly in South Dakota, although it dropped again in most states that use HealthCare.gov, due in part to an open enrollment window that was only half as long as it had been in previous years, as well as the Trump Administration’s decision to sharply reduce funding for exchange marketing and enrollment assistance.

The Mount Rushmore State is solidly Republican, with two Republican Senators, a Republian Representative, a Republican Governor, and Republican majorities in both chambers of the state legislature. Unsurprisingly, South Dakota is one of the states that has thus-far rejected federal funds to expand Medicaid under the ACA.

South Dakota health ratings

Year after year, South Dakota earns top marks for healthcare. The Mount Rushmore state ranked 15th out of the 50 states and the District of Columbia by the Commonwealth Fund’s 2017 Scorecard on State Health System Performance, up one spot from the previous edition of the scorecard.

South Dakota’s scorecard provides specific details about public health in the state and how the overall score was determined. The state fared best in the categories of Prevention & Treatment, and Avoidable Hospital Use & Costs, coming in 10th overall for both metrics. Overall, relatively few adults in South Dakota went without medical care in the past year due to cost (2nd in the nation), adults in South Dakota have generally had their recommended vaccines (1st in the nation), and most adults in the state had a dental visit within the past year (1st in the nation). However, the state ranked 48th in terms of the percentage of children who received preventive medical and dental care within the past year.

The state ranked a little lower in the 2017 America’s Health Rankings, coming in at 24th (down from 19th in the previous edition of the ranking. The state has experienced a recent increase in the prevalence of low-income adults who use tobacco, but the state has a low incidence of drug deaths, low birth weight, and physical inactivity.

Trust for America’s Health gives us another look at overall public health in South Dakota in their 2016 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.

How has Obamacare helped South Dakotans?

With a federally facilitated exchange and without Medicaid expansion, South Dakota has not fared as well under the ACA as those who expanded Medicaid, formed a state-run or partnership exchange, or did both.

According to US Census data, 11.3 percent of South Dakota residents were uninsured in 2013, and that had dropped to 8.7 percent by 2016. Nationwide, the uninsured rate started out significantly higher, at 14.5 percent, but had dropped to 8.6 percent by 2016.

If and when South Dakota expands Medicaid, the state’s uninsured rate will likely decrease sharply. Because the state has thus far refused to expand Medicaid, there are an estimated 15,000 people in the coverage gap in South Dakota, most of whom remain uninsured. They have income below the poverty level, are ineligible for Medicaid, and are also ineligible for premium subsidies in the exchange.

2018 rates and carriers

South Dakota’s exchange includes health insurance plans from two carriers in 2018: Avera and Sanford. Both insurers also offered coverage in the state’s exchange in previous years, and were the only two participating insurers in 2017 as well.

2018 rate increases ended up at an average of 29 percent for Avera, and nearly 16 percent for Sanford. In both cases, the rates would have been considerably lower if the Trump Administration hadn’t eliminated federal funding for cost-sharing reductions (CSR) in the weeks before the start of open enrollment for 2018 coverage.

South Dakota enrollment in qualified health plans

Because the state has not played a role in educating consumers about the state’s health insurance exchange, federally funded navigators affiliated with community outreach and advocacy groups are trained to help consumers in South Dakota.

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 2014, at the end of the first open enrollment period, 13,104 people had finalized their enrollment in qualified health plans through South Dakota’s exchange, and 89 percent of them qualified for premium subsidies.

By March 31, 2016, effectuated enrollment stood at 24,578. At the end of open enrollment on January 31, 89 percent of those who bought private health insurance plans through South Dakota’s exchange also received financial assistance.

In 2016, South Dakota was the state with the ninth highest exchange enrollment increase over 2015 – and the fourth highest of those using HealthCare.gov. Yet, South Dakota’s enrollment for 2016 was the fifth lowest among states using HealthCare.gov. That said, the state’s smaller population means fewer eligible enrollees.

Enrollment has continued to grow each year in South Dakota’s exchange, which has not been the case in most of the other states that use HealthCare.gov. 29,622 people enrolled in 2017, and 29,652 people enrolled for 2018—the highest enrollment the state’s exchange has had to date.

South Dakota and the ACA

In 2010, South Dakota’s U.S. senators were split on the Affordable Care Act. Democrat Tim Johnson voted yes, while Republican John Thune voted no. In the U.S. House, Stephanie Herseth Sandlin, a Democrat, voted yes. Sen. Thune remains in office.

Sen. Rounds did not seek re-election in 2014, but he continued to make Medicaid expansion a priority as he closed out his final term. Republican Sen. Mike Rounds replaced him and has called Obamacare “fatally flawed.” Kristi Noem is the U.S. representative for South Dakota, and she opposes the ACA.

South Dakota Governor Dennis Daugaard is also opposed to Obamacare, 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. Under the Obama Administration, HHS rejected both of his waiver proposals, and South Dakota has not yet expanded Medicaid.

The Trump Administration is much more open to waiver proposals like the ones that South Dakota had previously submitted, although Governor Daugaard indicated in early 2018 that the state is not reconsidering Medicaid expansion in the near future. However, if South Dakota were to propose a waiver under which Medicaid could be expanded to cover only people below the poverty level, it’s possible that the Trump Administration might approve it, whereas that was a nonstarter for the Obama Administration.

South Dakota’s state legislature has a strong Republican majority, generally opposed to Obamacare.

South Dakota Medicaid/CHIP enrollment

The Supreme Court ruled in 2012 that Medicaid expansion was optional for the states. However, as the ACA was written, exchange-based subsidies are only available for people with incomes between 100 and 400 percent of the federal poverty level. Below that range, federal lawmakers anticipated Medicaid coverage would kick in for everyone.

South Dakota is currently one of 19 states that has not expanded Medicaid under the ACA and has no imminent plans to do so.

Unfortunately, in states like South Dakota, 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.

As a result, in 2018, approximately 15,000 South Dakotans remained 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.

Despite a lack of Medicaid expansion, average monthly enrollment grew by 3,849 from 2013 to June 2016, a 3 percent increase. By late 2017, however, it had declined slightly, reducing the net increase since 2013 to just 2 percent.

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. The plan remained operational for existing members until June 30, 2015.

Medicare in the state of South Dakota

South Dakota Medicare enrollment reached 156,127 in 2015, about 18 percent of the state’s total population and slightly lower than the national rate of 17 percent.

The state’s enrollment breaks down to 87 percent who qualify based on age alone and 13 percent who qualify due to disability.

South Dakota’s per recipient spending is among the lowest in the nation, at $7,560 per beneficiary each year. The state ranks 46th in total spending on Medicare with $1.1 billion annually.

If they want additional benefits, Medicare beneficiaries in South Dakota can choose private Medicare Advantage plans instead of Original Medicare. 20 percent of South Dakota Medicare recipients did so in 2017. Slightly more than 94,000 South Dakota Medicare beneficiaries chose a Medicare Part D plan.

Sstate-based health reform legislation

Scroll to the bottom of the page for details about recent state-based health care reform legislation in South Dakota.


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 healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

More South Dakota coverage

Exchange

News, history, and enrollment info for your state marketplace

Medicaid

Your state’s Medicaid expansion, eligibilty, contacts

Medicare

Insurance for those over 64 (off-site)