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Support for Medicaid expansion grows in South Dakota, one of the last red state holdouts

At several points last year, Louise Snodgrass experienced some COVID-like symptoms, but worried each time how much testing or treatment would cost without health insurance.

“I would have set up a doctor’s appointment if I had insurance,” said Snodgrass, 26, who works two jobs to make ends meet in Brookings, South Dakota. “Instead I sat there thinking, ‘What the heck am I going to do? I don’t even know if I’m going to get tested.’”

Eventually Snodgrass was able to get tested — the result was negative — after a boss offered to pay for a $76 rapid test at a pharmacy. The experience helped persuade Snodgrass in January to purchase an insurance plan through the federal exchange under the Affordable Care Act. But the $40-per-month plan, after subsidies, has a $6,000 deductible that still puts many health care needs out of reach.

The coronavirus pandemic has laid bare Snodgrass’ health care dilemma and that of so many other Americans, but those worries could fade if advocates succeed in a new campaign to expand Medicaid in South Dakota. Expanding the service — which is funded by the federal government and states and provides health care for low-income Americans — could cover more than 40,000 uninsured South Dakotans, or about 5 percent of the state’s total population.

“We believe people need access to care, and we also know that Medicaid expansion has been successful across the country,” said Deb Fischer-Clemens, the president of the South Dakota Nurses Association, one of the groups backing the expansion effort.

South Dakota is one of just 12 states that have not yet expanded Medicaid under the Affordable Care Act, in the decade since the legislation was signed into law by former President Barack Obama in 2010.

Most of the remaining holdouts are conservative Southern states such as South Carolina and Texas, where opposition to the law known as Obamacare still runs deep among Republican elected officials. But voters in six Republican-leaning states have approved ballot initiatives to expand Medicaid, including in Missouri and Oklahoma in 2020.

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“Even in the deepest of red states, voters keep sending the same message. They want more health care, not less,” said Jonathan Schleifer, the executive director of The Fairness Project, a group that has backed Medicaid expansion ballot measures in the past.

The campaign to expand Medicaid in South Dakota, and similar efforts underway in Florida and Mississippi, will be an early battle over health care policy under President Joe Biden. Biden has vowed to build on the Affordable Care Act, with a plan that includes targeted aid to states with expanded Medicaid programs.

In South Dakota, adults without children and who are not disabled do not qualify for Medicaid, regardless of how much money they make. If the state expands Medicaid, individuals earning up to 138 percent of the federal poverty level, or $17,609 per year, would be eligible. A family of four earning up to $36,156 would qualify under the guidelines, according to a state report on Medicaid published last year.

A general view of the entrance to the emergency room at the Sanford USD Medical Center, a 545-bed hospital, as the coronavirus disease (COVID-19) outbreak continues in Sioux Falls, South Dakota, U.S., October 27, 2020. REUTERS/Bing Guan

Advocates are confident they can collect enough signatures by the deadline in November to get an expansion measure on the ballot in 2022.

But the pandemic has introduced challenges in the early going, making it harder to carry out a traditional, in-person petition drive. There is also an internal divide among expansion supporters over whether to push for a state law that could be delayed or changed by the state legislature, or a constitutional amendment that would be harder to pass, but could not be changed by state lawmakers after the fact.

Voter-backed ballot measures legalizing recreational and medical marijuana that passed in South Dakota last November have been tied up in court or delayed by the state legislature, underscoring the challenges of implementing such initiatives even after they’re approved.

Looming over the entire debate is Republican Gov. Kristi Noem, a strong opponent of Medicaid expansion who voted to repeal the Affordable Care Act as a member of Congress in 2017. The effort failed, but Noem used her conservative record in the House and vocal support for former President Donald Trump as a springboard for her successful run for governor the following year.

Noem is now a rising Republican star and is widely viewed on the right as a likely White House contender in 2024. A high-profile fight over health care could help raise Noem’s national profile, but it will also draw attention to her handling of the pandemic.

Noem has resisted mask mandates and other government restrictions to curb the spread of the virus. South Dakota has had one of the highest rates of COVID-19 infections and deaths of any state in the country, highlighting problems in a health care system long plagued by socioeconomic inequity.

Health care advocates have made the pandemic part of their argument for Medicaid expansion, but they’re also pointing to long-term health and economic benefits.

Uninsured people are less likely to go to the doctor for annual checkups and other routine care, and often wait until an issue becomes serious to seek emergency medical attention, said Dr. Shankar Kurra, the vice president of medical affairs at Monument Health, one of South Dakota’s three main health care providers.

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“What ends up happening is they come seeking acute care when it should have been primary care,” Kurra said.

Enrolling in Medicaid would give currently uninsured residents access to preventive medicine, allowing doctors to make early diagnosis and better manage chronic conditions like diabetes and hypertension, Kurra said.

Medicaid expansion would also boost aid for rural and Native American communities that lack local medical facilities, said Shelly Ten Napel, the CEO of Community HealthCare Association of the Dakotas.

“We have a lot of sparsely populated communities across South Dakota, and it is a challenge to maintain services in a community of 200 or 300 people that may be quite far from a local hospital,” Ten Napel said.

A healthcare worker wearing a powered air purifying respirator (PAPR) hood works at a drive-thru COVID-19 testing site at the Sanford Sports Complex Clinic, as the coronavirus disease (COVID-19) outbreak continues in Sioux Falls, South Dakota, U.S., October 28, 2020. REUTERS/Bing Guan

Having more health care options in rural communities would incentivize residents to seek jobs closer to home and help employers recruit new workers, said Tom Daschle, the former Democratic South Dakota senator.

“What I worry about are the small towns, the hundreds of towns that dot our state and other states like South Dakota that have a real hard time keeping young people there and creating jobs that are viable,” said Daschle, who served as the Senate majority leader from 2001 to 2003.

A healthier population would improve workforce productivity and add to a potential economic windfall from expanding Medicaid, advocates argued.

Under the Medicaid coverage formula, which is based on state per capita income, the federal government spends hundreds of millions on South Dakota’s Medicaid program each year.

In fiscal year 2020, the federal government’s share of South Dakota’s Medicaid spending was 62 percent. The total included a small increase in federal aid that all states received to help pay for the influx of people who enrolled in Medicaid after they lost their jobs or saw wages decline because of the economic downturn caused by the pandemic. As a result, the state’s share of its $992 million Medicaid program last year was $343 million.

South Dakota would wind up spending less on health care in the future by expanding Medicaid, because the federal government would pick up a larger share of the costs for services such as prenatal care for residents who are already enrolled in the program. Hospitals and clinics would also see a decline in uncompensated care costs for treating uninsured patients as more people without insurance enroll in Medicaid, health care experts said.

Under the Affordable Care Act, the federal government would cover 90 percent of the costs for expanding the program to more people, leaving South Dakota to chip in just 10 percent of the additional funding. The pandemic relief bill Biden signed last week includes extra federal funding for states that haven’t yet expanded Medicaid if they choose to do so.

Critics argue covering more low-income people would increase state health care spending, but numerous studies have shown health care spending has declined in states that expanded Medicaid. Between 2014 and 2017, expansion cut state spending on traditional Medicaid services by 4.4 to 4.7 percent, according to a study by The Commonwealth Fund released last year.

A report by the Kaiser Family Foundation marking the 10th anniversary of the Affordable Care Act concluded that states that expanded Medicaid saw a boost in health outcomes and stronger economies, while resulting in “positive net effects for state budgets and revenues.”

Proponents of Medicaid expansion in South Dakota said they watched with frustration in recent years as neighboring states — including conservative ones like Montana, Nebraska and North Dakota — reaped the health and economic benefits of expansion while their state lagged behind.

Noem’s predecessor in the governor’s mansion, Republican Dennis Daugaard, proposed a plan to expand Medicaid under the ACA in 2015. The proposal would have covered 55,000 residents and boosted health spending for Native Americans. But the state and the U.S. Department of Health and Human Services could not reach a deal to implement the expansion before Obama left office.

U.S. President Donald Trump and first lady Melania Trump are greeted by South Dakota Governor Kristi Noem and Senator John Thune (R-SD) as they arrive at Ellsworth Air Force Base, South Dakota, U.S., July 3, 2020. REUTERS/Tom Brenner

Momentum for expanding Medicaid in South Dakota slowed after the Trump administration proposed plans to turn Medicaid into a block grant program and allowed states to issue work requirements for Medicaid recipients. South Dakota applied for a work requirement waiver under Daugaard in 2018 but the policy never went into effect anywhere in the nation after facing legal battles that have gone all the way to the Supreme Court.

Republican state lawmakers have also long resisted calls for expanding Medicaid. The party has controlled both chambers of the state legislature since the mid-1990s, and currently holds 94 of the 105 legislative seats in the state House and Senate.

The South Dakota Department of Social Services, the agency in charge of the state Medicaid program, referred questions to the governor’s office.

Ian Fury, Noem’s communications director, wrote in an email that the governor has “promoted consumer-driven alternatives” to address rising health care costs, including bills in the current legislative session that would increase transparency in pricing and improve telehealth services.

“Governor Noem knows that expanding Medicaid is not the answer to accessing quality healthcare in South Dakota,” Fury wrote.

He also touted Noem’s handling of the pandemic and argued that expanding Medicaid would hurt the state’s economy. Fury noted that South Dakota had a 3.3 percent unemployment rate last December, tied with Utah for the lowest in the nation. The state had an unemployment rate of 2.9 percent at the close of 2019, then saw a spike in early 2020 followed by a steady drop back to pre-pandemic levels over the course of last year.

Despite continued Republican opposition, advocates for expansion said they believed the timing was finally right for South Dakota to take the step. There is little reliable polling on the Affordable Care Act in South Dakota, but one widely cited survey from 2014 found South Dakotans backed expanding Medicaid by a margin of 45 percent to 37 percent.

Expansion proponents estimate that support has only grown since then, as other aspects of the landmark health care law — such as protecting people with preexisting conditions from being denied coverage — have gained in popularity, even as Congress and state legislatures have continued waging a bitter partisan battle over the ACA.

“All of these arguments [against expanding Medicaid], which may have stung more ten years ago when the ACA passed, I don’t think they hold a lot of water any more. That’s why you see states like Missouri and Oklahoma passing Medicaid expansion,” said Rick Weiland, a former Democratic U.S. Senate candidate in South Dakota who is leading one group pushing for expansion.

south dakota capitol

The South Dakota State Capitol building appears in Pierre, South Dakota. Photo by Flickr user Stephen Conn

Weiland said the state’s struggles with the pandemic have also opened people’s eyes to the need for a stronger health care system. “They see the government has a role in this pandemic and that’s translating into other things like Medicaid expansion,” he said.

Weiland’s group, Dakotans for Health, has begun collecting signatures to place a constitutional amendment to expand Medicaid on the ballot next year. Several volunteers from the group said that they’ve found registered Republicans who are eager to sign, though most of the support so far has come from Democrats.

“I’ve had Republicans sign. The ones that have signed were just as adamant as Democrats,” said Val Parsley, a retired public school teacher. Regardless of party, she added, the support “really comes from a compassion standpoint. Why don’t we take care of our people? Isn’t it the responsibility of government to take care of its citizenry?”

A coalition of groups pushing for a ballot initiative that would create a state law to expand Medicaid is planning to start a petition drive this spring after the legislative session is over, said Fischer-Clemens, the head of the state nurses association and a lobbyist with Avera, one of South Dakota’s largest health care providers.

Members of the coalition and Weiland’s group said they expected both sides would coalesce around one strategy later this year. Even if advocates ultimately succeed in placing a measure on the ballot, it won’t come before voters until November 2022 — meaning implementation is still years away.

Snodgrass, a Democrat who ran unsuccessfully for a state House seat last year, said the wait would be worth it. Until the state acts, Snodgrass plans to stick with the low-cost health care plan that comes with a high deductible and plenty of stress.

“I want to make sure that I have a future and that I’m not paying for problems that I could have started taking care of before they happened,” Snodgrass said. “It would be wonderful if I was able to go to a doctor and not worry about what it was going to cost.”