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Savings and Reserve Fund Offer $18-Million Down Payment to Expand Medicaid

Last updated on 2015.06.11

South Dakota is spending less money on Medicaid than expected this fiscal year. Whether this unexpected underspending is related to the record low rate of growth of health care spending under the Obama Administration is open to discussion. Whatever the cause, Governor Dennis Daugaard has proposed amending the FY 2015 budget to reduce Medicaid funding by $2.648 million.

Those lower-than-expected Medicaid expenditures are part of $11.8 million in budget savings Governor Daugaard says we can write into our current budget. Those savings neatly cover the $10.8 million in lower-than-expected state revenues for this year. But the Governor is also proposing $26.1 million in new "emergency" expenditures that will go on the FY 2015 budget. The biggest chunk of that emergency money will come from cashing out a $16-million Medicaid reserve fund that Daugaard created earlier but now says is unnecessary.

Nowhere in Governor Daugaard's emergency expenditures or FY 2016 budget is a proposal to expand Medicaid, which in the coming budget year would cost us $2.1 million, or just an eighth of the Medicaid reserve fund that the Governor is spending on other projects. As the federal cost share drops from 100% to 90%, Medicaid expansion would cost South Dakota $38.6 million a year by 2020, but the billion-plus we'd get from Uncle Sam over a decade of expansion would create 29,500 jobs, boost our economy, and add tens of millions to our tax receipts. (Oh yeah, and we would save lives.)

Governor Dennis Daugaard has over $18 million he could use as a down payment on Medicaid expansion, one of the biggest, easiest health and economic stimulus programs he could enact. Legislators, let's turn the budget ship in that direction.


  1. Tim 2014.12.07

    Daugaard's rubber stamp legislature turning the budget ship? Cory, what are you drinking this early in the morning? That's damn strong coffee or a really stiff drink.

  2. Tim 2014.12.07

    Medicaid expansion is not on Daugaard's radar, he doesn't care about the poor uninsured, and it's beginning to look like he doesn't give a damn about anybody but his cronies. Expansion would be a great boost to the state, but probably won't make much difference to the rich in this state, and if he keeps his word and quits politics, he has no reason to pander to the masses in SD anymore. Nothing left to do for him over the next four years but take care of his friends.

  3. Jeff Barth 2014.12.07

    I have a sense (a hope?) that some Republican legislators have more interest in Medicaid expansion than they did before the election.

  4. Tim 2014.12.07

    Jeff, yes maybe 3 or 4, but the majority will do what Daugaard tells them to.

  5. Nick Nemec 2014.12.07

    There is also 9 million in the high risk pool plus whatever the yearly contribution to that pool is that is now available to fund expansion. Medicaid expansion is easily doable in SD, it just requires the will to do it.

  6. caheidelberger Post author | 2014.12.07

    Hey, Nick, now that you mention the high risk pool, do you know how much that 9 million is general fund money and how much is premiums from policyholders?

  7. JeniW 2014.12.07

    One time I checked into the cost of buying a policy through the SD high risk pool, if I did not have to have shelter, food, and other necessities, I might have been able to afford it.

  8. Owen 2014.12.07

    Jeni you are absolutely right. After I got laid off and couldn't get insurance I checked into the high risk pool as well. No way i could afford it

  9. mike from iowa 2014.12.07

    Koch bros prolly have designs on that 16 million Medicaid fund.

  10. Richard 2014.12.08

    The last numbers I saw indicated the Govenor's failure to expand Medicaid will kill 36-95 SD children and adults. That is a wide range, but even 36 unnecessary deaths is terrible. I once emailed the Governor and politely asked how he coped with these deaths on his conscience. I haven't heard back.

  11. leslie 2014.12.08

    I completely agree richard. this statistic is as troubling as 48,000 souls with out health care, delayed care, and no preventative care.

    what foolish state leaders.

    such united efforts by red states to spurn the ACA, are also carrying over to 27 Attorneys General and their governors teaming up to enable big fossil fuel, and carry-on republican obstruction in environmental, financial, social, immigration and other state and federal regulation. NYT yesterday.

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