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South Dakota health insurance

SD Medicaid expansion push takes back burner in 2016

South Dakota tends to score among the nation’s healthiest states in many rankings. The state also tends to lean more politically conservative, especially with its approach to the Affordable Care Act.

This guide to health insurance in South Dakota examines public health measures, legislation, Medicare, Medicaid, insurance enrollment, and the outlook for ACA implementation in The Mount Rushmore State.

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 2015 Scorecard on State Health System Performance. That’s significantly better than its namesake to its north.

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 category of Avoidable Hospital Use & Costs, coming in 8th overall for that measure. And while its percentage of uninsured adults ranked in the top half (13 percent/18th), its percentage of uninsured children ranked toward the bottom (8 percent/38th).

The state ranked a little lower in the 2015 America’s Health Rankings, coming in at 19th. In the past two years, South Dakota’s number of children in poverty has increased 21 percent, pulling the state’s ranking for this measure to the middle. Challenges also included access to primary care physicians, infant mortality and immunizations for adolescents. South Dakota performed more strongly in the measures of childhood immunization, lack of health insurance, and public health funding.

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.

Among states with the smallest reductions in percentage of uninsured from 2013 to 2015, South Dakota placed ninth, seeing rates drop from 14 percent to 10.6 percent. Nonetheless, South Dakota’s uninsured rate was better than the national average (11.7 percent) in 2015.

Were South Dakota to expand its Medicaid program, uninsured rates would likely see more dramatic reductions.

2017 rates and carriers

South Dakota’s exchange will include health insurance plans from two carriers in 2017: Avera and Sanford.

2017 rate increase requests have yet to be approved in South Dakota. Avera requested an average rate increase of 37.9 percent, and Sanford requested 36.34 percent. Final plan rates will be available on or before 2017 open enrollment begins November 1, 2016.

Avera and Sanford will also offer individual plans off-exchange along with Wellmark and DakotaCare.

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 19, 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.

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 Round 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. HHS has rejected both of his waiver proposals, and South Dakota has not yet expanded Medicaid.

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 2015, approximately 13,000 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. Gov. Daugaard plans to continue working toward expansion with a waiver.

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. 18 percent of South Dakota Medicare recipients did so in 2015. Slightly more than 94,000 South Dakota Medicare beneficiaries chose a Medicare Part D plan.

Sstate-based health reform legislation

Here’s a list of state-level health reform bills:

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