South Dakota voters approved Medicaid expansion, but implementation may not be easy

Reviewed by Emily Henderson, B.Sc.Nov 10 2022

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 expansion via the ballot box.

In Missouri, for example, experts said subpar publicity efforts and an outdated application system led to a glacial pace of enrollment after voters there approved Medicaid expansion in 2020.

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

South Dakota's Medicaid computer system "has a long way to evolve," Brooks said. "Unless they're going to really boost their eligibility [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 become eligible for Medicaid coverage.

Brooks said state administrators could face additional complications if the federal government ends the covid-19 public health emergency while South Dakota is enrolling newly eligible people into Medicaid. During the health emergency, states have been barred from dropping people who are no longer eligible for Medicaid, but they will resume doing so once the emergency ends.

Officials with the South Dakota Department of Social Services acknowledged Wednesday that they need to prepare. "We anticipate needing a significant number of additional staff and technology resources for implementation," Laurie Gill, the department secretary, said in a statement. She said the department created a leadership team to oversee necessary policy and system changes.

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

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

Marcus pointed to deadlines included in the amendment, and he noted that Gov. Kristi Noem — a Republican who opposed expansion — promised during a debate to implement the change if voters approved 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 through 64 will enroll in Medicaid.

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

The 2010 Affordable Care Act initially required states to expand their programs so more low-income adults could gain coverage, with the federal government paying 90% of the costs. But a U.S. Supreme Court ruling struck down that mandate.

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

Expansion proponents in South Dakota sought a constitutional amendment, which can't be easily repealed or revised. The amendment includes implementation deadlines and bars the state from creating extra rules, such as work requirements, for people who newly qualify for Medicaid.

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

Last year, for example, Noem spearheaded a lawsuit that overturned a voter-approved amendment to legalize recreational marijuana. But she recently said the Medicaid expansion amendment "appears to be written constitutionally."

States can face hurdles in rolling out Medicaid expansion even after implementation begins. Education, enrollment, and processing policies play a role.

For example, in 2021, Missouri hit roadblocks when lawmakers refused to fund the program, and the state implemented the change only after a judge ordered the state to begin accepting applications. Experts said Missouri officials put little effort into outreach and required people to navigate a bureaucratic application process. Data shows 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 the word about expansion through social media campaigns, TV interviews, and outreach events. The state also evaluated whether people who had applied to other benefit programs might 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 Napel, CEO of Community HealthCare Association of the Dakotas, said officials can take steps to ensure a positive experience in South Dakota. Creating a "simple administrative process" means less work for applicants and state workers, said Ten Napel, who advocates for clinics that serve low-income and uninsured patients.

Brooks, the Georgetown expert on Medicaid administration, said South Dakota's Medicaid practices aren't as strong as other states'. "South Dakota is not advanced in their use of technology," Brooks said. "I worry if it's too manually driven that the state will be overwhelmed. And that will slow down the processing and you could potentially see what we’ve seen in Missouri."

Brooks' concerns are supported by studies and data.

South Dakota uses multiple applications 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 says South Dakota is one of three states without an online account system. That means South Dakotans can't monitor 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 people by July 1.

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

But she said those changes won't be ready until fall 2023. That's months after the department is expected to see a flood of new, post-expansion applications.