- [Narrator] This is a production of South Dakota Public Broadcasting.

- Hello and welcome to South Dakota Focus.

I'm Jackie Hendry.

Voters approved a state constitutional amendment to expand Medicaid eligibility last fall, but that's not where the story ends.

We'll hear more tonight about what happens next, and what this means for South Dakotans.

Right now, South Dakota Medicaid covers children, pregnant people, people with disabilities, people 65 and older, and people who make 46% or less than the federal poverty line.

That's an annual income of less than $13,000 for a family of four.

By expanding Medicaid, the state will include anyone between the ages of 18 and 65 if they make 138% or less than the federal poverty line.

That's about $38,000 a year for a family of four.

Ahead of November's election, we talked with people on both sides of the argument to amend the state constitution to include Medicaid expansion.

So let's review why proponents say this is the right move for South Dakota.

Sarah Houska had to make a difficult decision.

In December of 2021, her five-year-old son was found unresponsive on a school playground from an apparent seizure.

It took months to get a diagnosis.

- And I was called out of work almost daily for two or three months, just getting him to appointments, picking him up from school 'cause he was having too many episodes, medicines causing issues and so, we had to pick him up 'cause they were scared of the behaviors happening.

And it was just a lot and I couldn't ignore it any longer.

It was too much to be working full-time.

- [Jackie] Her previous job offered family leave, but Houska couldn't see a way to make it work long-term.

She left her full-time job for a part-time job that offered flexibility to care for her kids and start her own business.

But leaving that full-time job meant losing her health insurance.

- It's hard.

I just don't get care right now.

And thankfully, nothing major has come up that's made me have to really think between what's gonna happen.

- [Jackie] Houska's son was diagnosed with psychogenic non-epileptic seizures, or pseudo seizures.

Both of her sons are eligible for Medicaid because they're under 18.

She is not.

Houska is one of thousands in South Dakota who could be covered if voters agree to expand Medicaid.

Zach Marcus is a spokesperson for South Dakotan's Decide Healthcare, a group that supports Amendment D to expand Medicaid.

- Every year, $328 million of our taxes that could be staying here in our economy, providing healthcare for hardworking South Dakotans, is leaving our state to fund healthcare for 38 other states like California, New York, that have already expanded Medicaid.

What we're saying is we want to keep our tax dollars right here in South Dakota, and make sure that hardworking people, who maybe don't get healthcare provided through their jobs, are able to access insurance and able to make sure that they can plan to see a doctor when they need to.

- [Jackie] The option to expand Medicaid was introduced in the Affordable Care Act during the Obama administration.

It's tended to be a partisan issue, but it's become increasingly popular as healthcare costs rise, including in South Dakota.

This is a broad coalition of supporters for this constitutional amendment.

Tell us who's on board with this.

- Yeah, so I think it's a great example of why this is such a good thing for South Dakota, that we have so many different kinds of groups involved in our coalition, right?

I mean, you probably just saw a couple of days ago, the State Chamber of Commerce announced that they are endorsing this effort as good for businesses in the state of South Dakota.

All kinds of healthcare providers and healthcare advocacy organizations, from hospitals and community health centers to the American Cancer Society Cancer Action Network, AARP, the American Heart Association, to Group Farm, the farmers union who represents farmers and ranchers around the state.

Different kinds of organizations with different kinds of focuses all saying this is a good thing for South Dakota.

- [Jackie] The South Dakota Municipal League is another group that supports the amendment.

It's an association of municipal leaders from across the state.

Rapid City Mayor Steve Allender, a Republican, serves as its president.

- And you know, South Dakota I sometimes think has a desire to be 50th in everything.

And it just doesn't have to be that way.

So now there's many states and many conservative states, who have adopted Medicaid expansion.

- [Jackie] Allender says, caring for the state's workers will improve productivity.

- South Dakota is a state that is founded by and held together by tourism and agriculture, both of which the workers are low earning workers.

I think it's a little offensive that we would rely on an industry to put us on the map, create thousands of jobs, put food on tables, and then tell 'em, "That's tough if they don't make enough money to take their kid to the doctor."

- [Jackie] Proponents also say expanding Medicaid will help struggling rural hospitals.

We know that South Dakota has a low Medicaid reimbursement rate.

By broadening eligibility, some people might think that makes the problem worse for hospitals and other care centers that are taking Medicaid patients and then operating at a deficit with that low Medicaid reimbursement rate.

Is that a valid point?

How do we see eligibility expansion co-mingling with that low Medicaid reimbursement.

- Yeah, so great question.

And again, I think it's important to remember that when someone is sick, they're going to go see a doctor, whether they have coverage or not, right?

The question is, are we going to see any money come out of that in reimbursement to the hospital, or is it fully going to be uncompensated care?

- It's interesting, I never realized what a privilege it is when you know, you so often ask your friends like, "Oh this is going on, what do you do?

What should I do?"

And it's, oh, just go see your doctor.

Ask your doctor.

Oh, this prescription helps.

And it's just...

When I just think about going to the doctor, it's like, okay, so if I do that, what am I not gonna do this month?

Is it that I don't invest in the business or I don't try to do this other thing with the kids?

Or how much can I cut down on the food budget to make it work to go to one doctor's appointment?

- [Jackie] And Sarah Houska is more informed than most.

She used to work for the State's Department of Social Services, helping people determine if they were eligible for Medicaid.

- The other people who I've had conversations almost daily in my last job with, who have chronic conditions and can't ignore their healthcare costs like I'm able to right now.

And that's such a heartbreaking conversation to say, I know you know that you're doing your best, and you're doing everything you can in this moment, and it's not 'cause you're lazy and you don't want to go get a job.

It's because you can't.

- [Jackie] There are other income-based options under the Affordable Care Act for people to get private insurance with subsidies, but Houska makes too much to qualify.

Even with a part-time job and a growing small business, she can't afford the monthly premium.

- I could have signed up for.

I would not have been able to afford it.

And I know this was my choice.

It felt out of necessity that I took this choice though.

And I mean to do that would've been to choose that over rent.

That's not an option.

- [Jackie] Houska first shared her story with a video for the American Heart Association, which supports expansion.

She has a message for other parents who find themselves in a similar position.

- A lot of us don't qualify today.

And it's even, just working full-time at a minimum wage job, you don't qualify, and that's not enough to make ends meet.

And there's no shame in advocating for what you need and you're doing your best, and you deserve the right to healthcare.

- [Jackie] South Dakota voters approved Amendment D in November, but the state's expanded Medicaid program doesn't take effect until July 1st.

It's a relatively short time to implement the program and the process has already begun.

Governor Kristi Noem publicly opposed Medicaid expansion during her reelection campaign, because of additional cost to the state.

But Noem said she'd honor the will of the voters.

She discussed it briefly during her budget address in December.

- Medicaid expansion passed on the ballot and therefore it will be implemented.

In every other state where Medicaid expansion was passed, the costs succeeded their expectations.

That's why this past year we did our homework, we researched those states, we consulted with experts to put together this budget plan to ensure that the law would be followed.

- [Jackie] Noem's proposed budget includes increased funds and full-time staff positions to account for the additional Medicaid users.

The state estimates about 52,000 residents could now be eligible for healthcare coverage.

Medicaid expansion will impact several state departments, but the Department of Social Services will see the biggest changes.

We'll hear more about that later in the program.

The governor's budget proposal for expanded Medicaid is just the beginning of the process.

Matthew McLarty is the Government Relations Director for the American Cancer Society Cancer Action Network in North and South Dakota.

The organization was part of the broad coalition that supported Amendment D. What happens next in this process?

- Sure.

Well, the legislature needs to approve the dollars that Governor Noem has put into her budget, to fully fund this project.

From there, it goes over to the Department of Social Services, where they will kind of create the plan to implement the Medicaid expansion.

And they are working on that.

And they have until, I believe, March 1st to submit that plan.

And really it's just going to be partnering with Department of Social Services and our legislators to make sure that this gets implemented properly, that it's properly promoted when it's time for people to be able to begin enrolling on July 1st.

And just making people aware that this option exists.

- Because Medicaid is a partnership between the state and federal government, the state needs to submit any changes in eligibility to the Federal Centers for Medicare and Medicaid services.

Some amendments to the state plan are available on the Department of Social Services website now, with more likely to come in the next few weeks.

Communicating the next steps and connecting with prospective Medicaid recipients is going to be a challenge.

During a recent presentation from the Department of Social Services, a lawmaker asked about plans to market the new qualifications.

The response came from the Department's Deputy Secretary, Brenda Tidball-Zeltinger.

- And I think what I would say is that I think there's a couple of different ways, again, that people will become aware of expansion.

We don't necessarily, we don't have a marketing campaign per se, planned independently.

- [Jackie] Instead, the department says uninsured people can be made aware of their eligibility when they eventually receive healthcare, or while working with other state social programs.

There's no plan yet for a targeted, state-sponsored outreach program for the thousands of newly eligible people.

Jill Franken is the State Volunteer President with AARP of South Dakota, another organization that supported the constitutional amendment.

- An important role that AARP and others in the coalition will be able to play is helping to inform, you know, folks in our state that this is now something they need to take advantage of.

Because that would be, you know, a really important aspect, not just getting that passed in November but then also making sure people are aware.

So that communication, you know, public communication on that's gonna be really important.

- [Jackie] Franken suggests keeping in touch with the primary care provider for individualized updates on Medicaid expansion.

But there may well be people who don't have a healthcare provider who are now eligible for coverage.

Matthew McLarty says the State Department of Social Services website is a good source for information.

- I would suggest just keeping up with the DSS website.

They provide a lot of great information there about when this is coming due.

There's also the government healthcare website that you can go to and begin to fill out paperwork and, you know, things like that to kind of get a jump on the program.

- [Jackie] Like AARP, the American Cancer Society Cancer Action Network is following the process and advocating for the population it serves.

- What we've found is that when people have access to, you know, insurance or Medicaid type system, they're more likely to visit their doctor.

They're more likely to have access to cancer screenings, diagnostic tests, items like that.

I mean, in the next year here, we will lose over 1,700 South Dakotans to cancer.

And we want to make sure that we get that number way down to the point where it's negligible.

- South Dakota is joining 38 other states that have expanded Medicaid eligibility under the Affordable Care Act.

All of our neighboring states, except for Wyoming, have expanded Medicaid eligibility.

But the programs are difficult to compare.

For instance, many participating states have a state income tax as a revenue stream for public projects.

South Dakota doesn't.

And population plays an important role, too.

The Dakotas are the only state in this group with fewer than a million residents, similar population density and agricultural base.

So we turn to our neighbors in North Dakota as an obvious choice for comparison, but it turns out it's a little more complicated than that.

Chris Jones has learned a lot about how Medicaid works in the past few years.

He's North Dakota's Commissioner of Health and Human Services.

Jones was appointed to the position three years after the North Dakota legislature adopted Medicaid expansion.

During the initial transition, Jones was working in the private sector.

- As a corporate healthcare executive, I thought that I could make a huge difference in how Medicaid operated.

Thought it was really inefficient, you know, really wasn't meeting the needs.

And I thought I understood about 40% of it, but at the end of the day, I only really understood about 8% of it.

It is very complex, but has a very important role in our state.

Medicaid expansion was passed and went live in 2014.

The history that I've been given, I work with some of the best legislators, and they said, Chris, the only way Medicaid expansion was going to pass is if it was administered by a private entity and a managed care arrangement.

- And that's the major difference between North Dakota's Medicaid expansion and how South Dakota will handle things.

North Dakota contracts with a third party to administer Medicaid benefits to those now eligible for coverage.

This option is more predictable from a state budget standpoint.

The state pays a set monthly premium for each enrollee, whether they receive treatment or not.

Handling the coverage with a third party means the state doesn't have to bring on more workers, which can be more attractive to more conservative lawmakers.

But it tends to be more costly to the state overall.

In most cases, South Dakota pays providers directly only when a Medicaid recipient receives care.

And Governor Kristi Noem's budget requests funding for nearly 70 new positions in the Department of Social Services to manage the additional workload.

- When I said earlier that the North Dakota legislators said they wanted to do managed care, what that meant was, we get dollars from the federal government and we pay a premium that is developed by actuaries, and then that premium is paid to a health insurer or a managed care organization.

And when someone with Medicaid expansion goes to the doctor, they hand the card, it looks more like a commercial ID card and the commercial or managed care organization then pays it.

So the way we administer Medicaid expansion is it's almost like an employer.

We fund the premiums, and then pass the managed care organization as the one who pays the claims.

- [Jackie] Commissioner Jones says federal funding played a part in that decision.

Medicaid expansion was 100% federally funded when North Dakota adopted the program.

Now, the federal government covers 90% of the costs.

- Because we did manage care, and it was quote unquote "free money," we paid at commercial rates.

So in other words we have been paying at about 175% of Medicare this whole time.

And South Dakota's Medicaid, that fee schedule for hospitals, for instance, is about 80% of Medicare.

So I think the way the agency is moving forward in South Dakota, those cost increases will not even be comparable to what has occurred in North Dakota.

Or said differently, if individuals are looking at North Dakota and trying to compare it to South Dakota, it's not possible.

We are the highest cost state in the country.

- Commissioner Jones of North Dakota says he had a conversation with leaders from South Dakota's Department of Social Services, but it's not clear exactly which other states the Department has consulted as it plans for expanded Medicaid coverage.

A spokesperson for the department said in an email, "South Dakota consulted with states that have expanded recently, as well as states geographically similar to South Dakota."

That question also came up during a recent presentation for lawmakers, as the Department explained the potential budget impact of the additional enrollees.

Representative Linda Duba, a Democrat from Sioux Falls, posed the question to South Dakota Medicaid Director Sarah Aker.

- [Linda] Did you talk to other states that are similar to South Dakota and ask them what their ramp up was?

In other words, they identified a population and it came in over X?

- Mr.

Chair?

We had really great conversations with a number of other states that have expanded recently, specifically Oklahoma met and exceeded their estimates.

However, they did expand during the public health emergency with the maintenance of effort.

So again, there's some variability there.

But again, we're wanting to plan for that entire ramp up and to see that full Medicaid expansion population included in our budget.

- [Jackie] Oklahoma also expanded Medicaid through a voter approved constitutional amendment.

That was during the summer of 2020 and the program launched about a year later.

Congress ensured the federally declared public health emergency for COVID-19 meant people could stay on the program, even if they exceeded income requirements during that time.

The result has been higher costs for states.

That health emergency has been extended every 90 days since early 2020.

But if it ends before July, it may not be an issue for South Dakota.

Thanks to adequate funding, Oklahoma had a relatively smooth transition into expanded Medicaid coverage.

The Oklahoma Healthcare Authority held outreach events and launched a social media campaign to raise awareness of the program.

The state had already approved applications for about half of its estimated new enrollees a month before the program launched.

It's not yet clear if South Dakota will take similar proactive measures.

In North Dakota, Commissioner of Health and Human Services, Chris Jones, says the benefits of Medicaid expansion are clear.

Understanding that our states are very different, things are gonna be different for everyone.

What kind of advice might you give to South Dakota policymakers who are looking at this challenge, based on North Dakota's experience?

- My advice to policymakers is that overall, it is a positive program for those that it serves.

And it will have an impact on improving behavioral health across the state.

It will have a minor impact on the number of uninsured in the state.

It's a good thing.

I would also tell policy makers to really give your Department of Human and Social Services a ton of grace and the resources necessary to do it because it is a very big lift to push this forward.

- Based on the results of November's election, the benefits of expanding Medicaid outweighed the costs for the majority of South Dakota voters.

Now, Medicaid expansion is enshrined in South Dakota's constitution.

As the legislative session continues, lawmakers will decide whether to accept Governor Kristi Noem's budget proposals to fund and staff the expansion as written, or make adjustments.

So far, advocacy organizations like the American Cancer Society and AARP of South Dakota support the governor's proposal.

They maintain this is a step towards a healthier South Dakota, and some base that on their own experience.

Before Jill Franken became the Volunteer State President for AARP South Dakota, she was the Public Health Director for the city of Sioux Falls.

That made her the head of Falls Community Health, a federally qualified health center.

Franken says half of the patients there are uninsured and she saw the struggles they have.

- They started out working and oftentimes, they became unemployed because their healthcare issues became just so difficult for them to manage while being employed.

That's when I got extremely passionate about it.

When I saw people really falling through the cracks from an access perspective.

They could come to our clinic and they could be seen, but the second that they perhaps got an unfortunate diagnosis, let's just say breast cancer, for example, it was almost as if they were like, "Well what am I gonna do about this?

Why would I even wanna know that I have breast cancer?

Because I don't have the ability to do anything about it.

I can't afford the surgery it might take.

I can't afford the medications if I have to go under like, any kind of chemo or hormone therapy."

So, you know, those are the things that every day South Dakotans face all the time when they're uninsured through a variety of circumstances.

- [Jackie] The state estimates 52,000 South Dakotans will become eligible for healthcare under Medicaid expansion.

Sarah Houska quit her job with the Department of Social Services to take care of a son with medical complications, and she remembers difficult conversations with people who had no healthcare coverage.

- Well, I've had conversations, you know, almost daily in my last job with, who are, have chronic conditions and can't ignore their healthcare costs like I'm able to right now.

And that's such a heartbreaking conversation to say I know that you're doing your best, and you're doing everything you can in this moment.

And it's not 'cause you're lazy and you don't want to go get a job.

It's because you can't.

- [Jackie] During a presentation for the Joint Appropriations Committee, State Medicaid Director Sarah Aker told lawmakers opportunities for preventative care could cost the state less in the long run.

- There's many advocates that have been part of passing Medicaid expansion as part of the ballot initiative.

I think those individuals are really looking to help people get coverage and receive services for preventative things.

And that's our hope too, is that we'll be preventing higher costs by creating an environment where individuals can access those preventative services, prevent more hospitalizations and try to prevent or, I would say, avoid those higher healthcare expenditures.

- [Jackie] The state must submit its plan for expansion to the federal government by March 1st.

South Dakota's expanded Medicaid takes effect on the first day of July.

You can follow the ongoing process of Medicaid expansion by following our gavel to gavel coverage of the state legislative session.

Audio from committee hearings and the House and Senate floor is available on sd.net and on the SD Net app.

You can also watch proceedings on the House and Senate floor on TV and on our YouTube channel.

There's also weekly updates and analysis, during "In The Moment," every Wednesday on SDPB radio.

I'll see you again on Thursday, February 23rd, to see what we've learned about a possible end to the sales tax on food and what that means for you.

Until then, I'm Jackie Hendry.

Thank you for watching.