Frequently asked questions about health insurance
coverage options in South Dakota
The South Dakota health insurance marketplace uses the federally run exchange, so residents enroll through HealthCare.gov. Read our overview of the South Dakota health insurance marketplace.
In South Dakota, the open enrollment period for 2021 health plans ran from November 1 through December 15, 2020. Outside of that window, a qualifying event is normally necessary in order to enroll in an individual market plan (on-exchange or outside the exchange). But the rules are different in 2021, due to the ongoing COVID pandemic. An enrollment window is available through August 15, 2021, and South Dakota residents do not need a qualifying event to use it.
The special enrollment window through August 15 is an excellent opportunity for people to take advantage of the newly enhanced premium tax credits (premium subsidies) created by the American Rescue Plan. Uninsured residents can enroll, and people with off-exchange coverage can transition to the exchange – which is necessary in order to take advantage of premium tax credits, which are available in 2021 to some people who were formerly not eligible due to the “subsidy cliff.” And current enrollees can switch to a different plan if they choose to do so, which might help them take full advantage of the additional premium tax credits and eligibility for cost-sharing reductions.
There are two insurers — Avera and Sanford — that offer coverage through South Dakota’s marketplace for 2021, and both offer plans statewide.
Average premiums increased by 2.6 percent in South Dakota’s individual market for 2021.
With a federally facilitated exchange and without Medicaid expansion, South Dakota has not fared as well under the ACA as states that expanded Medicaid, formed a state-run or partnership exchange, or did both.
According to U.S. Census data, 11.3% of South Dakota residents were uninsured in 2013, and that had dropped to 8.7% by 2016 — although it has been steadily increasing since then, reaching 10.2% in 2019. Nationwide, the uninsured rate started out significantly higher, at 14.5%, but had dropped to 8.6% by 2016, and had increased to 9.2% by 2019 (various Trump administration policies had the effect of increasing the number of Americans without health insurance).
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 14000 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.
South Dakota’s U.S. Congressional delegation is comprised entirely of Republicans: John Thune and Mike Rounds in the Senate, and Dusty Johnson in the House. All three are opposed to the ACA; Rounds has called Obamacare “fatally flawed.”
Former Representative Kristy Noem, who is also opposed to the ACA, successfully ran for governor in South Dakota in 2018 (Johnson replaced her in the House of Representatives), and has been in the governor’s office since early 2019.
South Dakota has had only GOP governors since 1979 — the longest streak of Republican governors in the country. Former Gov. Dennis Daugaard was opposed to Obamacare, and opted to let HHS run the state’s exchange. But he was 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.
But under the Obama administration, HHS rejected both of his waiver proposals. The Trump administration is much more open to waiver proposals that were a no-go under the Obama administration, although no state has secured approval for Medicaid expansion capped at the poverty level.
South Dakota’s state legislature has a strong Republican majority, generally opposed to Obamacare.
South Dakota has not expanded Medicaid under the ACA and has no imminent plans to do so. Instead, during the Trump administration, South Dakota was seeking federal approval to impose a work requirement in two counties for the existing Medicaid population (the Biden administration has notified states that Medicaid work requirements are a non-starter).
In the dwindling minority of states, like South Dakota, where Medicaid has not yet been 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% of poverty.
As a result, in 2021, approximately 16,000 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.
Total enrollment in Medicaid/CHIP has increased nationwide by an average of 35% since 2013 (mostly as a result of the ACA’s expansion of Medicaid), but in South Dakota, it has only increased by 3%. And even that slight increase has been driven by the COVID pandemic, with widespread job/income losses. Prior to the pandemic, Medicaid enrollment was lower in South Dakota than it had been in 2013.
But South Dakota Medicaid expansion advocates are working to gather enough signatures to get Medicaid expansion on the 2022 ballot in South Dakota. This is how Medicaid has been expanded in Maine, Utah, Idaho, and Nebraska. Voters in Oklahoma and Missouri approved Medicaid expansion ballot measures in 2020, which is why those states are expanding Medicaid in 2021 (funding for Medicaid expansion in Missouri is still uncertain as of the spring of 2021).
Read more about Medicaid expansion in South Dakota.
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.