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.