South Dakota voters approve Medicaid expansion, but implementation may not happen

RAPID CITY, SD — South Dakotans voted Tuesday to expand the state’s Medicaid program to cover thousands of additional low-income residents, becoming the seventh state to approve the expansion through the ballot box.

But as other conservative states have shown, voter approval doesn’t always mean politicians and administrators will rush to implement change.

In Missouri, for example, experts say subpar campaign efforts and an outdated application system led to a sluggish enrollment pace after voters approved Medicaid expansion in 2020.

A similarly slow rollout could happen in South Dakota, said Tricia Brooks, a research professor at Georgetown University who studies Medicaid.

South Dakota’s Medicaid computer system “has a long way to go,” Brooks said. “Unless they are really going to increase their qualifications [processing] capacity, then I think we’re in for a rough or rocky start to expansion.”

That could leave some South Dakotans temporarily uninsured even after they qualify for Medicaid coverage.

Brooks said state administrators could face additional complications when the federal government ends the Covid-19 public health emergency when enrolling newly eligible people in South Dakota Medicaid. During a health emergency, states are prohibited from excluding people who are no longer eligible for Medicaid, but will resume doing so once the emergency is over.

Officials with the South Dakota Department of Social Services acknowledged Wednesday that they need to prepare. “We anticipate that implementation will require a significant number of additional personnel and technology resources,” Department Secretary Lori Gill said in a statement. He said the department has created a leadership team to oversee the necessary policy and system changes.

Missouri and most other states where voters approved Medicaid expansion faced politicians who tried to block implementation.

But the pro-expansion group South Dakotans Decide Healthcare is confident the change required by the constitutional amendment voters approved Tuesday will be implemented, campaign manager Zach Marcus said.

Marcus pointed to the time frame included in the amendment, and he noted that Gov. Christy Noem — a Republican who opposed the expansion — promised during a debate to implement the change if voters approve it.

South Dakota became the 39th state to approve Medicaid expansion, after 56% of voters supported the measure. The Department of Social Services expects about 52,000 newly eligible residents ages 18 to 64 to enroll in Medicaid.

Medicaid is the nation’s leading public health insurance program for people with disabilities and low-income people. It is funded and administered by the federal government and the states.

The 2010 Affordable Care Act initially required states to expand their programs so that more low-income adults could get coverage, with the federal government paying 90% of the cost. But a US Supreme Court ruling overturned that order.

Most states have adopted Medicaid expansion through governors’ orders or legislatively-approved bills. But voters in Maine, Idaho, Nebraska, Utah, Missouri, Oklahoma and South Dakota overrode resistance from lawmakers and governors by approving the expansion through ballot measures. Every time Medicaid expansion has been on the ballot, it has passed.

Supporters of expansion in South Dakota sought a constitutional amendment, which could not be easily repealed or amended. The amendment includes implementation deadlines and prevents states from creating additional rules, such as work requirements, for those newly eligible for Medicaid.

In the past, South Dakota politicians have filed lawsuits that have successfully argued that voter-approved measures violated the state constitution.

Last year, for example, Nome led a lawsuit that overturned a voter-approved amendment to legalize recreational marijuana. But he recently said the Medicaid expansion amendment “appears to be constitutionally written.”

States may face obstacles to expanding Medicaid even after implementation begins. Education, enrollment, and processing policies play a role.

For example, in 2021, Missouri hit a roadblock when lawmakers refused to pay for the program, and the state implemented the change only after a judge ordered the state to begin accepting applications. Experts say Missouri officials have made little effort at outreach and need people to navigate the bureaucratic application process. Data shows that the state also failed to process applications on time.

Oklahoma, where voters approved expansion the same year, had the opposite experience. Lawmakers there agreed to fund the program, and the state spread word of the expansion through social media campaigns, TV interviews and outreach events. States have also evaluated whether individuals applying to other benefit programs may be newly eligible for Medicaid.

By December 2021, Oklahoma had enrolled more than 210,000 people through Medicaid expansion, while Missouri had enrolled fewer than 20,000.

Shelly Ten Nappel, CEO of the Community Health Care Association of the Dakotas, said officials can take steps to ensure a positive experience in South Dakota. Creating a “simpler administrative process” means less work for applicants and state workers, said Ten Nappel, who advocates for clinics that serve low-income and uninsured patients.

South Dakota’s Medicaid practices are not as robust as other states, said Brooks, a Georgetown expert on Medicaid administration. “South Dakota is not advanced in their use of technology,” Brooks said. “I’m concerned if it’s too manually driven that the state will be overwhelmed. And that will slow down the processing and you’ll probably see what we saw in Missouri.”

Brooks’ concerns are supported by studies and data.

South Dakota uses multiple application and processing systems for Medicaid and other benefit programs when it could use just one, according to a March report by KFF and Georgetown’s Center for Children and Families.

The report also states that South Dakota is one of three states without an online account system. That means South Dakotans can’t review their applications or upload documents to renew their coverage.

The Department of Social Services must submit its Medicaid expansion plan to the federal government by March 1 and begin providing benefits to newly eligible individuals by July 1.

Gill said the department is developing a system that is cellphone friendly and will allow people to create online accounts.

But he said those changes won’t be ready until fall 2023. The department is expected to see a flood of new, post-expansion applications in the months after that.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Along with policy analysis and polling, KHN is one of the three main operating programs of the KFF (Kaiser Family Foundation). KFF is a non-profit organization that provides health information to the nation.

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