Daugaard weighing Medicaid expansion

South Dakota Gov. Dennis Daugaard plans to address Medicaid expansion in his Dec. 8 budget address, his chief of staff said Tuesday.

“It’s the governor’s hope that he would be able to provide a recommendation one way or the other,” Tony Venhuizen said.

The governor’s office said expanding the program could extend eligibility to 55,000 additional South Dakota residents. And the cost to the state could range from $30 million to $33 million a year beginning in 2020.

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Venhuizen said the state's Health Care Solutions Coalition continues to meet to discuss logistics of expanding the jointly funded federal and state health insurance program for needy people. He said Daugaard's main concerns with the expansion are keeping costs to the state low and ensuring that Native Americans in the state receive good care.

And though the plan for expanding the program in the state is not final, Venhuizen said it relies largely on ongoing efforts by The Centers for Medicare & Medicaid Services (CMS) to update a policy on funding 100 percent of funds for Medicaid-eligible American Indians through the Indian Health Service or tribes.

Currently, Medicaid-eligible American Indians can choose to receive covered services from any provider that participates in a state's Medicaid program. Depending on where those patients seek services can affect the rates the state and federal government have to pay.

If a patient seeks care from a non-IHS or non-tribal facility, the federal government pays between 50 percent and 74 percent, while the state pays between 26 percent and 50 percent. By comparison, if that patient seeks care through an IHS or tribal provider, the feds cover 100 percent and the state doesn't have to chip in.

In fiscal year 2014 the state paid about $64.1 million for American Indians eligible for Medicaid who sought services from non-IHS providers.

CMS drafted a white paper last month in which it considered allowing IHS and tribal facilities to provide services through contracts with outside providers, which would allow the state to get a 100 percent federal funding match. The proposed changes would also allow increased flexibility of both the IHS and tribal providers as well as the state's Medicaid programs.

The Affordable Care Act offered incentives for states to expand Medicaid to residents earning up to 133 percent of poverty, which is $15,521 for an individual or $31,721 for a family of four.

South Dakota initially balked at the plan, citing potential costs to the state. In 2014, federal officials quashed a proposal that would have partially expanded coverage in South Dakota, covering residents earning up to 100 percent of poverty. That came out to about $11,670 for an individual or $23,850 for a family of four.

About 26,000 South Dakotans earn less than 100 percent of the poverty line. Another 22,000 uninsured South Dakotans are between 100 percent to 133 percent of the poverty line.

Venhuizen also noted that even if Daugaard recommended the expansion in his address, state lawmakers would still have the ability to weigh in during session.

“Even if all of that comes together, the governor has always said he wouldn’t move ahead without the approval of the Legislature," Venhuizen said.

Follow Dana Ferguson on Twitter @bydanaferguson