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Will SDGOP Allow Hospitals to Fund Medicaid Expansion?

Senator Bernie Hunhoff (D-18/Yankton) insists “we’re making progress” toward expanding Medicaid under the Affordable Care Act. Is the key to bringing our ever-recalcitrant Governor Dennis Daugaard around getting South Dakota’s hospitals to pay for it?

That’s the funding route some other Republican-controlled ACA-objector states are pursuing, though with significant political difficulty:

…Arizona, which is controlled by Republicans, was among the first to tap hospitals in a 2013 deal to expand Medicaid. Since then, GOP-led Indiana has tapped the Indiana Hospital Association to partially fund its expansion along with cigarette tax revenue. Tennessee, which debated the issue shortly after Indiana announced its expansion in late January, went further. Hospitals there agreed to cover all of the potential costs the state would face. But the Tennessee state Senate rejected the plan, and the state House then decided against even giving the plan a vote in committee. Tennessee illustrates the political hurdles that remain despite promises of budget neutrality — a dynamic playing out in Utah and Kansas too [Chris Kardish, “GOP Charging Hospitals with Medicaid Expansion’s Future,” Governing, 2015.03.17].

According to this August 2014 analysis from the Urban Institute, South Dakota would need to spend $157 million over ten years to expand Medicaid as envision under the ACA. In return, the state would get $2.1 billion in federal funding. Spend a dollar, get $13.37 back. South Dakota hospitals would get $800 million for what would otherwise be uncompensated care.

Cost of Medicaid expansion in 24 states still resisting plan, Urban Institute/Robert Wood Johnson Foundation, August 2014
Cost of Medicaid expansion in 24 states still resisting plan, Urban Institute/Robert Wood Johnson Foundation, August 2014 (click to embiggen!)

The massive economic stimulus South Dakota would get from expanding Medicaid would benefit the entire state, including hospitals. It is not unreasonable to ask all beneficiaries to shoulder some of the cost… but don’t hospitals already bear sufficient cost in accepting the lower reimbursement for Medicaid patients?

Expanding Medicaid purely or partially with hospital dollars would be better than nothing. But the better than 13:1 return on investment shows South Dakota would still come out well ahead even if taxpayers footed the entire bill. What are we waiting for?

By the way, the Urban Institute report also calculates that South Dakota spends more in a single year on tax subsidies to attract businesses than it would over ten years to expand Medicaid. In other words, a thirteenth of our annual corporate welfare bill could cover Medicaid expansion, keep our neighbors healthier, lower hospital costs, and create 29,500 jobs. Medicaid expansion isn’t just corporate welfare; it’s everybody welfare!


  1. mike from iowa 2015-03-18 11:12

    Oh man,ain’t they a caution? Obama needs to sign an executive order ordering Medicaid expansion in all states-if for no other reason than the humanitarian side of it-and then tax the koch bros. There is 21 trillion plus bucks offshore and Uncle Sam is owed a large chunk of that in back korporate taxes.

    Wingnuts-all the trouble you get is only what you deserve. Starve the poor,feed the rich.

  2. Don Coyote 2015-03-18 12:52

    @MFI: SCOTUS held in National Federation of Independent Business v. Sebelius that the forced expansion of Medicaid was coercive and exceeded Congress’s spending power.

  3. mike from iowa 2015-03-18 13:01

    Which is prolly why I want Obie to issue an executive fiat and it will also make congressional heads explode.

  4. caheidelberger Post author | 2015-03-18 13:26

    Let’s not get tangled up in technicalities: even though “Don” doesn’t believe in GDP, the hard fact is that expanding Medicaid would be a boon for South Dakota’s economy. Why are we saying no to that? And why is a Republican Governor who is all about spending state dollars on corporate welfare to boost business still balking at spending state dollars to do the same thing and improve health care?

  5. Les 2015-03-18 13:31

    Why? T. Denny? Why T. Denny?

  6. leslie 2015-03-20 20:29

    HUGE ISSUE, Dems neeed to get outta the statting blocks ahead on this.

  7. leslie 2015-03-20 20:35

    coyote-i agree, Obama has to assure dems get five solid votes on the court. scalia and thomas are awful, roberts and kennedy are salvageable possibly and i can’t rember the other one, but its time we TAKE IT BACK.

    thank you for your coercion observation-typical repub spin. the court took a shot that nobody expected and called an act serving the people devious.

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