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Essay From Pierre- “Is Medicaid Expansion Right For South Dakota?”
We Can Do Better!

Medicaid and Medicare were established in 1965 under President Lyndon B. Johnson’s massive government expansion called the “Great Society.” Medicare was intended to be health insurance for the elderly who were not adequately covered by employee-based programs, and Medicaid was to be health insurance for the poor. Medicare is an actual health insurance program for the elderly. Medicaid, however, is a social welfare program.

In 2010, Congress passed the Affordable Care Act (ACA) also known as “Obamacare.” That act required Medicaid to take on childless, able-bodied adults with income up to 138% of the Federal Poverty Level (FPL). According to the US Department of Health and Human Services website, the federal poverty level for a single adult is $12,880, which means those making under $17,774 per year, now qualify. In 2012, the Supreme Court found that mandatory Medicaid expansion was unconstitutional and would be left up to the states. Since then, only four states west of the Mississippi, out of 12 total, have resisted the siren song of federal money- South Dakota, Wyoming, Kansas, and Texas. Those four states have some of the lowest Medicaid enrollment numbers of all the states, and the 12 that have not expanded Medicaid have below average enrollment numbers.

The Medicaid.gov website says Medicaid covers “…eligible low-income adults, children, pregnant women, elderly adults and people with disabilities. Medicaid is administered by states, according to FEDERAL requirements. The program is funded jointly by states and the federal government.” Medicaid is the “SINGLE LARGEST source of health coverage in the United States.” [Emphasis added]

To receive federal Medicaid funds, certain groups and services MUST be covered in addition to OPTIONAL ones. South Dakota already goes beyond mandatory requirements by covering home and community-based services, organ transplant services, adult dental services, child dental services, Healthy Homes, transportation assurance, and more.



In my first year as a legislator assigned to the Appropriations Committee and Joint Committee on Appropriations, I came to picture Medicaid as a three-legged stool; Eligibles (those who qualify for Medicaid), Providers (those who give Medicaid services), and Benefits (what the state covers under Medicaid for eligible persons). That year we expanded two of the three legs by adding more providers and more benefits, which expanded the overall Medicaid program in our state.

Breaking traditional protocol, I spoke against the expansion of Medicaid in the general appropriation bill. More votes were cast against the ‘g-bill’ that year than probably ever in South Dakota's history. The bill still passed, and my speech didn’t win me any fans in the Daugaard administration, or in the South Dakota healthcare industry. Still, I will never forget the legislators and staff who thanked me afterwards for having the courage to speak the truth. Being a rookie, I didn't realize how rare that was, it was my first year after all. It’s simply not politically correct to criticize anyone for expanding government in our supposed “conservative” state.

So, what changes with Medicaid expansion? Single, childless, able-bodied adults who are not currently eligible will be added to the rolls. At present, a young adult receiving Medicaid must meet income guidelines and have dependent children, or be disabled and receiving Supplemental Security Income (SSI).

Medicaid is funded jointly by the state and federal government. The state’s share is determined by the Federal Medical Assistance Percentage (FMAP) rate, which changes every year according to that state’s per capita income compared with other states. The higher a state’s per capita income, the larger the state share of the payment, but the fed’s share can never fall below 50%. South Dakota’s current FMAP rate is about 57% federal (which does not include a 6.2% bump during the “public health emergency,” which was just extended another three months out to the middle of October), with the state picking up roughly 43% of Medicaid costs. In FY22, (the fiscal year that just ended) over $1.1B of our $5B state budget was spent on Medicaid. Almost 22 percent of our entire state budget was spent on this one welfare program - BEFORE expansion!

South Dakota had over 127,000 Medicaid enrollees by July 1, 2022, meaning that well over 14% of our population is already receiving Medicaid. If we add in the 18K on CHIP (Children’s Health Insurance Program), that goes up to over 16% of our population receiving taxpayer-funded medical services in South Dakota.

In contrast, 25-37% of the population is enrolled in Medicaid, in many of the states that have already expanded. I should note that 47% of South Dakota medical service enrollees received some sort of covered medical service in the month of June. The total cost of those services was a whopping $110 million or just over $1,600 per recipient, in June alone. Now, we're expected to believe that by expanding services to 33 percent more people (42,500), we will only see an increased annual cost of $308 million dollars, after we just spent one-third of that, last month, on those currently enrolled?

The fiscal note on Amendment D (Medicaid expansion) shows the federal government would pay their regular FMAP rate for current enrollees plus an additional 5% for two years after expansion. For the added enrollees, the federal government would pay 90% and the state would pay 10%. Care for the incarcerated breaks down the same way, 90% federal/10% state. Any savings would be minimal, and by the end of the second year any savings we would still be receiving would be outstripped by a 3 to 1 ratio, due to the additional expenditures we would have, and it would only get worse from there.

The federal government is broke and can’t meet Social Security obligations beyond 2034 without drastic changes to the program. Our country is more than $30 Trillion dollars in debt, which averages to $243,000 PER TAXPAYER. Why would we believe that Medicaid obligations will be met?

Medicaid harms the poor, the Physicians and the Taxpayers according to the Association of American Physicians and Surgeons. According to a study published in the Annals of Surgery, Medicaid recipients had higher post-operative fatality rates compared to those on private insurance. And perhaps most damning, Medicaid is responsible for the worst health outcomes in Americans, with disparate and disproportionate impacts upon minority, and disadvantaged communities.

"Many politicians sell this as government compassion. However, it really means minorities disproportionately receive the worst healthcare, and have the worst health outcomes, in America," Study by Physicians For Reform.

Oregon has been considered the model for Medicaid expansion, after the legislature voted to expand it in 2008. However, Oregon is now leading the nation in overdose and deaths,
due to a lack of services. In 2015, the Oregon Health Plan (charged with overseeing Medicaid), decided to cut costs by removing opioid treatment from the list of covered services through contracted CCOs (Coordinated Care Organizations). Instead, the state moved Medicaid recipients to state-run methadone clinics, and daily dosing regiments. Stable patients went from 28 day prescriptions, to daily check-ins. With work obligations, and normal life, many relapsed. Just last year, the state decriminalized the use of all street drugs like heroine, methamphetamine, cocaine and more. In addition, the state reallocated 400 million dollars of marijuana taxes, from public education to fund treatment centers. At the last minute, Governor Kate Brown announced she would delay the funding of treatment centers. This directly resulted in the current surge of opioid related deaths, as facilities became over burdened and services became scarce.

There are better policy-based solutions that we should be considering. South Dakota currently has some of the lowest-priced private health insurance plans in the nation, the issue is out-of-pocket costs. If we instead, focused on solutions that actually help the people who need it, like moving to a premium-support or cash-assistance model, we could lead the nation in fiscal responsibility and better health outcomes for all.



By migrating the state's share of Medicaid expenses, we can start to think outside-the-box and re-imagine the entire concept of Medicaid as we know it—we can do better. Rather than placing more people into a broken system, we should be focused on creating ways to help people get the private insurance and better care we know is possible.

Currently, a patient who needs financial assistance must apply for insolvency through their county. The medical establishment then eats that cost, once an application for financial assistance is approved. However, the state could instead create a fund to reimburse health systems that waive patient balances. Thus we help people when they need it, rather than breed complacency through constant hand-outs.

For example, a business owner in my district hires ex-convicts and teaches them skills that would normally cost several thousand-dollars to learn at any technical school, saving them that cost via hands-on learning. Sadly, He told me that most of them do not stay past a few weeks, because "it’s easier for them to stay home and collect welfare." That’s just one anecdotal story, but an unfortunate reality. As our government seizes more collective wealth, to incentivize complacency and essentially pick winners and losers, the more harm it does to our state and nation.

Despite popular belief, socialism is not about workers getting together and starting their own companies. Socialism is when the government seizes the means of production, and in the case of Medicaid expansion, the means of production is our health. In light of an aging population, and chronically ill new generations, why would we pay more money for less services, and sub-standard care? If people truly want socialized medicine, they're free to create a cooperative in a laissez-faire capitalist constitutional republic. Conversely, once we give un-elected bureaucracies more power over our health choices, and means of producing health care, there's no going back. Socialism is coerced injustice by pseudo-intellectuals, thinly veiled as humanitarian policy.

Do we need a safety net? Yes, but, who is responsible for that safety net? Throughout history, family relied on family. When that wasn’t possible, the Church provided help. Today, the Department of Social Services has replaced family and faith communities, as a primary source of assistance. Government was always the last resort. After decades of expanding reliance upon the welfare state, government assistance has now become the first option, instead of the last. “Free government money” is never free…it’s always the product of someone’s labor. To return to the strong work ethic and independent spirit that made this nation great, we must find ways to decrease our reliance upon our failing federal-run systems, rather than expanding them. We can do better!

--Representative Taffy Howard served as an officer in the United States Air Force, and was elected to the South Dakota House of Representatives in November 2016. Howard serves as vice-chair of the Appropriations Committee

Post Date: 2022-08-15 08:10:07Last Update: 2022-08-15 10:18:33


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