Research shows potential positive results of Medicaid expansion

Expanding Medicaid in South Dakota will create better health, stronger hospitals and more vibrant schools and businesses, supporters of Amendment D claim.

Apparently, South Dakotans agree as recent polls show up to 62 percent favor expansion. The issue is on statewide ballots in the Nov. 8 general election.

Nearly all of the state’s medical associations, the South Dakota Municipal League, the Great Plains Tribal Leaders Health Board, AARP South Dakota and others are working to ensure passage in November. 

By not expanding Medicaid, South Dakota is turning down $328 million in federal funding annually, said Zach Marcus, campaign manager for South Dakotans Decide Healthcare. 

If Amendment D passes, the state will see $3.5 billion in new economic activity and 4,000 new jobs, he said. 

About 43,000 South Dakotans presently are uninsured. Many of these are working but make too much to qualify for existing Medicaid programs but not enough to afford health insurance on the open market. About 14,000 are Native Americans.

Generally, these people must walk into hospital emergency rooms for routine care. In many cases, they are unable to pay for medical services, causing hospitals to write it off in the form of charity care or unpaid accounts.

“The emergency room is the absolutely most expensive place to receive care,” said Paul Macek, interim CEO at Prairie Lakes Healthcare System in Watertown. “Unfortunately, it is the only alternative for the people that would be covered by the Medicaid program. They would have access to a primary care physician as compared to seeking out basic, primary care in the hospital emergency room.”

That causes Prairie Lakes Healthcare System in Watertown to write off between $3.8 million and $4 million annually, Macek said. “If Medicaid expansion was in effect, we would receive about 60 percent payment from Medicaid,” he said. “That would generate an additional $2.3 to $2.4 million for Prairie Lakes.”

Additional Medicaid revenue would be used for staffing as well as helping absorb inflationary increases. 

That revenue is especially important to rural hospitals. Reports say that since 2010 more than 138 rural hospitals have closed and rural hospitals in states that have expanded Medicaid are 62 percent less likely to lose. 

“If you look at the Southeastern states that have not expanded Medicaid,” Macek said, “those are the states that have the highest proportion of rural hospitals that have closed over last five to 10 years.”

South Dakota has 11 rural hospitals that currently are vulnerable to closure, he said.  Losing those hospitals “would be catastrophic for those communities.” 

Many people eligible for the expanded Medicaid are “farmers, ranchers, early retirees and a big proportion are people in the 50-65 age group.”

Many of those people are only one accident or illness away from bankruptcy, Macek said.

Nebraska, which expanded Medicaid in 2020, has seen early success. 

“Emerging data shows that the number of state residents without health coverage has plunged, hospitals are feeling less stress on their bottom lines and fewer people are filing for bankruptcy,” a Sept. 25, 2022, Omaha World Herald report said. 

Nebraska hospitals wrote off $20 million less in charity care and bankruptcy filings fell by 23.5 percent. 

While offering Medicaid to those in need seems logical, there remain legislators who see sinister things behind the curtain.

Some legislative opponents say providing health insurance to people making up to 138 percent of poverty wages will cause them to decide not to work. 

“That’s not what is happening in other states,” Marcus said. “This is really designed so someone can come into the program and then work their way out of it by getting a promotion or finding a different job that provides health care.

“For the most part, people will not be on it indefinitely, nor do we want them to be,” he said.

More importantly, a September 2020 Stanford Graduate School of Business report said a study conducted by Stanford and two other universities showed the Medicaid expansion improves health. 

“Patients between the ages of 50 and 64 who were covered by the expansion suffered 30% fewer strokes and heart problems, were 17% less likely to be diagnosed with diabetes, and 10% less likely to be diagnosed with high blood pressure, when compared with patients who were not covered,” it said.

If voters approve the expansion, Wyoming will be the only nearby state that has not expanded. So far, 38 states have expanded the program.