Costs for South Dakota Medicaid Expansion

Added September 19th, 2013 by

A Medicaid Expansion Taskforce was appointed by South Dakota’s governor in the final days of the 2013 Legislative Session.  This week the taskforce released its final  Report examining opportunities and challenges of Medicaid Expansion in South Dakota

SD Budget & Policy Project analysed the data included in the report along with national research to answer the following questions

1. How much would expansion cost each of us in South Dakota in new state spending? 

Answer:  $2.28 a year beginning June 2014; increasing to $44.28 a year by 2020.

Chart 1 - Analysis and graphic by SD B&PP; Data Source p 26 SD Medicaid Taskforce Report and US Census

Chart 1 – Analysis and graphic by SD B&PP; Data Source p 26 SD Medicaid Taskforce Report and US Census

Based on analysis of data in the taskforce report (pps 24-26), the SD state general fund cost for Medicaid Expansion would be $2.28 per year per South Dakotan (for fiscal year beginning June 2014) and rise to $44.28 per year per South Dakotan in fiscal year 2020.  In 2020 the state’s share of benefit costs stabilizes at 10% with the Federal Government paying 90% of benefit costs.  The taskforce estimate assumes 100% of South Dakotans eligible under Medicaid expansion would enroll by fiscal year beginning June 2015.  The estimates also assumes 1% annual enrollment growth 2017-2020 and a 5% inflation rate. 

2.  How large is the cost increase as a percentage of state general fund Medicaid spending? 

Answer:  0.3% in 2016, increasing to 5% in 2022.

According to analysis by the Urban Institute and Kaiser Commission, expanding Medicaid in South Dakota would increase state Medicaid general fund spending by less than 1/3 of one percent in 2016 (compared to state Medicaid general fund spending without Medicaid Expansion).  Long term, annual SD Medicaid general fund expenditures (2022) secondary to expansion are 5% higher than without expansion.  Cummulatively, the increase over the 10-year implementation timeframe, (2013-2022) is 2.9% due to expansion.

3.  Where do the uninsured impacted by Medicaid expansion live?    

Answer:  In every South Dakota county.

SD B&PP analysed US Census data to see where uninsured South Dakotans impacted by Medicaid expansion live. See recently research  County level data on impact of Medicaid Expansion in South Dakota 9-16-13  which includes analysis and a county-by-county table. 

4.  What happens to uninsured people in South Dakota if Medicaid is not expanded? 

Answer:  The poorest third of South Dakota’s uninsured non-elderly adults will remain uninsured (Charts 2 & 3)

Uninsured non-elderly South Dakotans living in households that are below 100% of the federal poverty level will not have access to Medicaid through expansion or federal subsidies to purchase health insurance through the Marketplaces.  Federal subsidies are only available to households with incomes between 100% and 400% of the federal poverty level. See SD B&PP analysis cited above for details on the low-income uninsured South Dakotans who fall into this insurance-coverage-doughnut-hole. 

Chart 2 - Analysis and graphic by SD B&PP; Source US Census 2011 SAHIE

Chart 2 – Analysis and graphic by SD B&PP; Source US Census 2011 SAHIE


Chart 3 – Analysis and Graphic by SD B&PP; Data source US census 2011 Small Area Health Insurance Estimates
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