The federal government has approved Governor Dennis Daugaard’s suggestion that Indian Health Service pick up the tab for American Indian patients who seek additional care at non-IHS facilities. The language in the letter from the feds to the state indicate that Governor Daugaard has persuaded the feds to make this change not just for South Dakota but for all states:
Upon execution of a written care coordination agreement, this will be effective immediately for states for the expenditures for services furnished by non-IHS/Tribal providers to AI/AN Medicaid beneficiaries who are patients of an IHS/Tribal facility acting under such agreement, as described below.
This update in payment policy is intended to help states, the IHS, and Tribes to improve delivery systems for AI/ANs by increasing access to care, strengthening continuity of care, and improving population health [letter from feds to South Dakota, in Bob Mercer, “Feds to Change IHS Payment Policy,” Aberdeen American News, 2016.02.27].
Remember that this change could save South Dakota $67 million a year by moving Indians off Medicaid and onto IHS coverage. Let’s return to Governor Daugaard’s explanation of the savings in his December budget address:
The United States Government has a treaty obligation to provide health care to Native Americans, and that obligation is supposed to be met by the Indian Health Service. If a Native American who is Medicaid eligible seeks care, the Medicaid program covers that care and if it’s provided through the Indian Health Services, Medicaid is reimbursed 100% from the federal government.
In the most recently completed fiscal year, IHS spent $69.2 million providing health care to Native Americans who were also Medicaid eligible, 100% federally reimbursed. That’s how it is supposed to work for all Native Americans, but it doesn’t always happen that way. Many Native Americans in South Dakota are not able to be served by IHS. Maybe there’s no IHS facility in their area, maybe IHS doesn’t have the right specialists available that are needed, or maybe there are long wait times and there’s an emergency. No matter the reason, when a Native American who is Medicaid eligible does not get care through Indian Health Service, but instead goes to another provider, the cost is shared between the state and federal government at the normal FMAP rate.
Last year, our Medicaid program spent $139 million on health care for Native Americans at the normal FMAP rate, and $67 million of that money was state general funds [Governor Dennis Daugaard, FY2017 Budget Address, Pierre, South Dakota, 2015.12.08].
The Governor is seeking that $67 million to make it possible to finally expand Medicaid under the Affordable Care Act without spending any new state money. We need just $12 million to expand Medicaid this year; our share of the cost grows to $57 million by Fiscal Year 2021, when the cost-share formula settles to its final 90% federal/10% state split. Here are the complete budget savings for the first five years of the Governor’s proposed IHS/Medicaid trade-off:
| Fiscal Year | SD savings by shifting costs to IHS | SD cost to expand Medicaid | Net SD savings |
| 2017 | 67 | 12 | 55 |
| 2018 | 67 | 28 | 39 |
| 2019 | 67 | 34 | 33 |
| 2020 | 67 | 46 | 21 |
| 2021 | 67 | 57 | 10 |
| total: | 335 | 177 | 158 |
The South Dakota Health Care Solutions Coalition, the panel Governor Daugaard assembled to work out this IHS/Medicaid switch, thinks it can put in place all the policies necessary to implement the IHS portion of the plan by June. It looks to me as if they could act faster than that: whip up the written care-coordination agreement mentioned in the federal letter, email it to every health care provider in the state with the YES box checked, and tell them to sign and return that document to Pierre and/or D.C. by yesterday.
The question is whether the Legislature will go along with translating that $67 million gift from President Obama (there goes that man in the White House again, making Republican politicians lives worse by trying to make everyone else’s lives better) into the policy initiative the Governor wants. The Legislature still needs to authorize the state to spend the $373 million in federal money that would come in this year to cover the expanded Medicaid program (IHS plus Medicaid—$440 million in federal spending in South Dakota—think stimulus!). The Legislature is pushing House Bill 1234 to monkey wrench Medicaid expansion by usurping the Governor’s authority to make Medicaid decisions. And Republican legislators at the Aberdeen crackerbarrel yesterday repeated the specious concerns voiced by Rep. Al Novstrup last weekend about how we can’t trust the feds to fulfill their treaty obligations to our Indian brothers and sisters. (I say specious because we don’t hear Republican legislators talking about treaty obligations under normal circumstances, only now when they need some moral cover for opposing Medicaid expansion.)
But wait—$67 million? That figure sounds familiar. $67 million… where else is the Legislature debating that figure?
New funding for teacher salaries
The formula requires $81.6 million in additional state funds. Because the new formula rolls pension fund expenses into the formula, the $19.2 million collected by the pension levy counts against that total need. Therefore, the need of new state funds to fully fund the new formula is $62.4 million. In addition, state-level programs described below have a cost of $5 million, bringing the total need to $67.4 million.
The proposal meets the entire $67.4 million need with new state funds, raised by an increase in the state sales tax. The plan increases the state sales tax by one half-cent, from 4% to 4.5%. This increase is projected to generate $107.4 million in FY17 and is used to cover the state’s cost of $67.4 million.
No existing school funds are repurposed to meet this $67.4 million need [Governor Dennis Daugaard, “The Governor’s Blue Ribbon Teacher Pay Plan,” released February 2016].
$67 million is the amount of new revenue Governor Daugaard wants for competitive teacher salaries. $67 million is the amount anti-tax Republicans have said (against the repeated head-shaking of appropriators and clear-headed candidates) they think they can find in “over-appropriations” and other inefficiency in the existing budget.
$67 million is the amount of money President Obama just unchained in our state budget.
Those coinciding numbers open the door for a devilish deal:
- South Dakota accepts the Indian Health Service expansion, moving Indian patients off the Medicaid books and saving $67 million.
- Republicans refuse to expand Medicaid, thus pacifying the Koch brothers and thrilling their donors and voters with one more poke at President Obama.
- Republicans kill House Bill 1182, the half-penny sales tax Governor Daugaard wants to use to fund competitive teacher pay, further thrilling their donors and voters by blocking a new tax.
- Republicans transfer $67 million from state Medicaid expenditures (now covered by IHS, thank you, President Obama!) to state aid to education to cover the teacher pay raises embedded in Senate Bill 131, the Governor’s new K-12 funding formula, thus pacifying teachers and defusing the voter anger that would throw all the bums out if they don’t act on the teacher shortage this year.
I don’t like this devilish deal. Expanding Medicaid and raising teacher pay are both good policies for South Dakota, and we have the wealth to implement both. But Republicans are a lot less likely to lose votes for blocking Medicaid expansion for the fourth year in a row than they are for leaving South Dakota teacher pay at 51st in the nation for the 31st year in a row. And from what I’ve seen published about the feds’ letter to South Dakota, the expansion of IHS coverage does not appear to continge upon states’ expansion of Medicaid. Republicans could move the $67 million in Medicaid savings straight to the K-12 budget and nobody would bat an eyelash… except for the 50,000 South Dakotans the Governor kinda-sorta wants to see covered by the Medicaid expansion.
The right thing to do is use Medicaid savings to expand Medicaid and use other new revenue to raise teacher pay. But Republicans looking to save their seats might consider the above IHS/K-12 a more devious but satisfying and seat-saving trick.
Someday the tables need to be turned on these non-profit hospitals that have hundreds of millions to start a hundred clinics overseas and build the nicest and the best, hundreds of thousands on competing ads saying they are better than the hospital across town, etc etc.
Yet, they only write off 6% to charity all the while criminally overcharging everyone, sometimes 10x-100x the actual price. It is very possible for them to step up and pick up the people who are slipping through the cracks in our beloved state. Instead they make those of us in the legislature out as the misers. Privately some docs friends of mine have tried to get Sanford to focus on the Rez instead of Ghana and they got nowhere. Time to make public their pricing so you go to the hospital and know what everything costs. No more charging people like me and my family…. $72 for rubbing alcohol in the last 3 hours of my father’s life, he was probably dead on the road anyway.
I oppose medicaid expansion because SD is a dependant state and expanding that dependance is moving in the opposite direction. All the repubs who demand a balanced budget in DC seem to have no concept of what the cuts in dependant states will feel like, and the taxes, if indeed they balanced the budget in Washington. I support SD neighbourliness and it’s time for the monster non-profits to give back and not just the churches.
The richest nation in the history of the world and we cannot manage to support the basic human right of health care when most other first world countries do so?
What we need is single payer health care with the power of the federal government to negotiate and bid pricing. We need true competition for medical service contracts. We need innovation and competition instead of monopoly or oligopoly power exerted by these consolidated mega health care systems.
If a person like Mr. Hickey cannot understand the humanitarian necessity of Medicaid expansion I would say Governor Daugaard’s plan is dead in the water. Even though the plan would bring $300 million a year into this state and take care of 50,000 people who need health care, we are going to make it a matter of principle. What principle is governing when you don’t value healthcare for 50,000 South Dakotans? You will never get the private healthcare systems to take the place of what our government could do to provide healthcare to poor people–not in a million years!
Beyond the issue of Medicaid expansion,why not have everyone covered by Medicare and have the huge negotiating power of Medicare negotiate for health care services, thus having competition in the marketplace? There would be no more need for huge advertising budgets to get patients in the door. We would get rid of a lot of the middle-men costs of administering health insurance currently. Doctors would compete against doctors for contracts to provide health care services. Why are Republicans against competition in the marketplace for health care services?
There is a lot of cost savings and competitive pricing in a single payer system, but we also could pay for universal healthcare if we would simply stop fighting stupid no-win wars which has primarily been a Republican led problem. Wars over healthcare and roads over teacher pay, it boggles the mind!
there is room for profit, research and constant evolving technology for the docs, scientists and clinics/hospitals–for the best care–but the next step has to be affordability and funding. screw insurance/wall street in all forms and daugaard-types (EB5/MCEC EXPLOITATION) should NEVER again be able to discriminate against anyone’s eligibility.
I’m enjoying single payer over here in Scotland. The free prescriptions are nice. The waits and service aren’t.
Big sign in the docs office says “each appointment is 10 minutes and will address only one health issue. For additional health concerns, schedule an additional appointment.” My wife has had significant shoulder pain for months: hard bed, planes, who knows? She still can’t get in to see the doc – they now have her going to a website for “exercises” for three weeks and then there is a number to call after that if she is still in pain. We got her a gym membership and a personal trainer has it figured out. I need supplemental oxygen now, according to my Jan 6 visit at Mayo/Rochester. Been back in the UK since the 7th of January and am still waiting on an appointment for referral to the respiratory specialist which is the only place I can get a referral for oxygen.
The whole health care system in the states is whacked – Obamacare written by insurance companies and providers. In SD, we have payers now also providers – monopolies really. Costs go up regardless. America is broke.
Mr. Hickey, I hate to tell you this, but you and your wife are still receiving better care than many people in this country. Free prescriptions? Sweet. I don’t know anyone in this country who get free prescriptions. As for doctors, well, at least you have hope of seeing a doctor – there are many people who will only get to see one if and when the Health Wagon comes to their section of the country. And I personally know people here in South Dakota who work, but cannot afford health insurance, and fall below the level for the ACA and thus don’t get Medicaid here, and so don’t get health care at all. But please, continue to tell us how bad you have it, and how any attempts to make things better for people – attempts to help people actually stay alive – is simply encouraging dependence.
50,000 anecdotes of citizens living IN south Dakota that do not have health care. 30-90 dead anually, waiting on sdgop since 3 years ago.
sore shoulder….
30-90 dead annually. I don’t buy it.
The governor’s 2016 budget estimates federal revenue of almost $1.7 billion. That’s 40% of the state budget for next year. My point is it is a little late to decide we are not going to take federal money on principle. We are taking federal money for everything under the sun right now so why should we decide now that 50,000 of our South Dakota citizens should not have health care? Isn’t healthcare as important as any of the other federal dollars we are taking?
And as far as the federal debt goes, our $300 million a year for Medicaid expansion would be a rounding error. The idea that we are going to meaningfully reduce our deficit based upon not giving 50,000 South Dakota citizens health care is lunacy.
How is it that we are arguing whether poor people should pay a half a cent more for a dollar of food on principle, but we are not talking about all of our citizens getting healthcare on principle? Also, if you don’t think $300 million in South Dakota each year would be great for our economy and lift some of the poor out of their impaired economic status, I don’t think you are being honest. Welcome back to bizzaro world!
So healthcare delivery is slow in some nations that have universal care. Does that mean that we couldn’t take that idea and improve upon it? For instance, the bidding that would take place under single payer here could include evaluations of service satisfaction and quality assurance metrics. Penalties or loss of contract would occur with substandard care. All of the studies and evidence that I have seen shows that the US healthcare system is very inefficient. This is not rocket science if we have the political will to make it happen.
We need to have a comprehensive effort to balance the federal budget and get control of our debt, but we can’t start by denying the poor health care. What kind of country does that? Especially one that spends trillions on foreign wars at the same time we are deciding healthcare is too expensive to give to our own citizens.
Mexico.
The Blindman
South Dakota: Land of Infinite Virulence.
Darin makes some absolutely excellent points that show the errors in Hickey’s argument. I would hope Hickey will think about Darin’s points and reconsider advocating for the refusal to provide health care to those who would qualify under the medicaid expansion. Thanks Darin!
Why do the Scotland tax payers have to pay for Mr. Hickey’s medical care? Is he now a citizen of that fine country? Does he support Scottish independence?
“America is broke”. Not when it comes to defense spending and conservative republican corruption.
http://interested-party.blogspot.com/2016/02/coal-crash-leaves-wyoming-hospitals.html
I pay for my health insurance in the US, Grudz and in order to get a visa to study here I had to pay the NHS annual premium for my wife and I like everyone else who lives here.
Darin does make good points. Considering our dependency what is a few more dollars, it’s a drop in the bucket actually.
Here’s the reality of what is going to happen if Indians are kicked off of South Dakota Medicaid and transferred to IHS.
Let’s say an Indian goes to Sioux San here in Rapid City with a critical illness like cancer, Sioux San says sorry we don’t treat cancer patients and we are all out contract money for this year,
It is typical for IHS to run out of those contract dollars immediately upon receiving them.
Now that IHS is broke and Daugaard kicked them off Medicaid, where in the hell do they go?
Hickey can make all the ideological arguments he wants about healthcare, but the reality is that Native Americans will suffer.
And about our sales tax and the proposed half cent increase, remember that every Indian that lives in the state spends their money here, thus making them South Dakota taxpayers.
I agree with Cory, I think Daugaard and this republican legislature are muddying things up with the increase sales tax and now Medicaid Expansion, it is all too convenient.
If the half cent sales tax goes through, Native Americans will be paying 7.5% just like everyone else.
By the way, I really appreciated post Darin.
30-90 lives a year. Old news. Look it up. I did 3-4 years ago. Rev., is it? Your party doesn’t buy it either, same as climate change. Statistics, science. Kind of a no-brainer.
It is the pits, Revvy but the game is dictated by Washington. Where they go we go, eventually. 10% is the max we will pick up or approx 30Mil in the future, until they change that formula. There is plenty of deception on the health loss for those who can’t afford to pay. But when in Rome, or Pierrre or DC.
Non can afford it. 2 yrs of cancer will run $500k to a mill.
Most cancers can be traced to environmental factors and those responsible should be held accountable by We the People. That’s exactly why The Kochs have lobbyists to buy off South Dakota’s bureaupublicans and Pat Powers.
http://www.lcv.org/media/press-releases/2015-National-Environmental-Scorecard-Reveals-Most-Anti-Environmental-Congress-in-History.html
Tom Daschle, call your office.
Roger, that sounds like a real problem. Medicaid never cuts people off, does it? Maybe you should visit with Al Novstrup and give him a better justification for opposing this plan.
And yes, the water is very muddy. The Governor is rigging a Rube Goldberg machine to ensure that he doesn’t spend one extra cent to make Medicaid expansion happen. Daugaard is actually increasing our dependency in a way that straight Medicaid expansion would not. We could just implement the program the way other states have, shouldering our fair share of the burden and doing good for our people. Dennis isn’t willing to shoulder even that ten percent; he’s asking for even bigger federal subsidy to do the job.
When you go see a doctor here in the United States, it is for one issue, unless it is the VA and then they actually ask what other problems you may have. For anyone to think that you can go in for an office visit and have the doctor sit down for an hour to discuss what may or may not be your problem is not realistic. The doctors here are no different that they are in Europe. I have been to both. I remember taking my youngest to a doctor here in South Dakota when he was a kid. My son had strep throat and the doctor was treating him for that, I asked about something else and the doctor told me that my visit was for the strep throat and if there was something else, make another appointment. That was 25 years ago, nothing has changed. Our delivery system for medical care is far more expensive for less than it is damned near anyplace else. If you really want to see how screwy things are, check out a dentist in Mexico or Europe, you can pay for your air expense with your savings. A friend goes to Thailand for orthopedic work and pays for the trip with what his savings are and then some. Universal health coverage is the best foot forward and Medicaid Expansion is the beginning of that first step here. Bravo to the governor for doing his job.
I knew Rube Goldberg. Dennis Daugaard is no Rube Goldberg.
Mr. Grudznick, you are Rube Goldberg, look in the mirror.
Bleeding the beast, Governor Daugaard? How Mormon of you.
Mr. H, both of us like bills number 1.2.3.4 but in this case does the law bill come into effect before the end of the legislatures or could Good Governor Daugaard act quickly and usurp the meaning of the legislatures? I counted votes and there were not enough to make the law bill happen right away or turn over a veto by the Governor himself so I think these nay-sayers are all between a rock and a bigger rock.
Denny has little choice with 64+ counties bearing the burden for medical care. Crazy way to run a railroad, init?
Lar, big fans of 30 or fewer counties, you and I both. Let us start with Fall River and West Pennington rolling into Custer, eh?
Cheyenne River as the boundary work for your people, grud?
Eastern Pennington should be rolled into the Haakon, et al.
Indeed, but let us count Wasta as being on the east bank.
I don’t think there is any justification for a Christian pastor to be against providing healthcare for the poor, or any Christian for that matter b/c of government dependency. No,that way of think is not working for this agnostic. In the bible that so many Christians claim to live by you are supposed to provide healthcare for the needy. You are supposed to take care of ALL of your brothers and sisters, and you can’t say we can’t afford it in the richest country in the world. Discrimination against the LGBT and now discrimination against the poor. Young people are just sprinting as far away from that kind of twisted Christian thinking.
Mercer thinks IHS movement is huge news. Jerry and Cory’s discussion is important. I, unlike Mercer, do not trust daugaard and hope i am wrong on expansion, teachers, IHS, EB5, MCEC, Regents , election cover up, nepotism and….
That Mr. Mercer fellow is puppeting much of what happens, folks. On teachers, expansion, Regents, and he has already exposed the E-B5 as a non event. Mr. Mercer is a monstrous reporter. The most monstrous in Pierre. Perhaps the only, but that makes him the most of all.
les, meet grudz, you two will be very hippy together