Steinhauer Proposes SB 186 to Expand Medicaid, Forestall Hospitals’ Amendment D

The Steinhauer/Rave gambit is on!

Since the South Dakota Association of Healthcare Organizations* announced its coalition and its plan to circulate a petition to write Medicaid expansion into the South Dakota Constitution, I’ve wondered if the well-connected and influential political organization, headed by Republican insider, Regent, and former legislator Tim Rave, would use its ballot question merely as leverage in lobbying the 2022 Legislature and withdraw Amendment D once it achieves its real Legislative objectives. Last month, Senator Wayne Steinhauer (R-9/Wall Lake) offered the hospital lobby exactly that deal: legislative action in return for calling off the public vote.

Steinhauer has now filed the bills that could replace Amendment D.

Yesterday, Senator Steinhauer filed Senate Bill 186, which would finally expand Medicaid under the Affordable Care Act. SB 186 differs from the hospitals’ Amendment D and the currently circulating initiated measure from Dakotans for Health* in three possibly important ways:

1. Unlike Amendment D but like the currently circulating initiated measure,  SB 186 does not explicitly provide for covering people making above 133% and up to 138% of the federal poverty level. However, this extra five percent is a confusing point of the ACA’s Medicaid expansion provisions, and it appears that, as with the proposed initiated measure, SB 186’s citation of federal law may automatically encompass that 5%. That’s one of the first points we need to clarify in committee.
2. Unlike both Amendment D and the proposed IM, SB 186 does not protect South Dakotans who would qualify for Medicaid expansion from additional burdens or restrictions that the Legislature might impose upon them. SB 186 would thus allow the Governor and the Legislature to get between 42,000 South Dakotans and the affordable health coverage they need with work requirements and other bureaucracy.
3. Section 2 of SB 186 includes a self-destruct clause: if the Republicans  do reëlect Trump and manage to stay on task long enough to actually repeal the Affordable Care Act, South Dakota’s Medicaid expansion would immediately terminate.

SB 186 has one important similarity to both citizen initiatives: it does not enact Medicaid expansion until July 1, 2023.

Senator Steinhauer laid some groundwork for SB 186 last week when he filed Senate Bill 102, which creates a special fund to take in the temporary incentive money that South Dakota would receive under the American Rescue Plan for expanding Medicaid and keep that money and any interest earned thereupon from being used for anything but Medicaid. Remember: that’s not the ongoing 90% match we’d get under the Affordable Care Act; that’s just the extra 5% federal match we’d get for two years after expanding Medicaid. (Expect Rep. Jon Hansen to cry, “Biden bucks!“)

Senate Health and Human Services was supposed to hear SB 102 Monday, but Chairman Steinhauer deferred his bill until Friday. Watch the Senate HHS agenda: it would be quite logical for Steinhauer to place his actual Medicaid expansion bill on Friday’s agenda right alongside his expansion lockbox.

Everybody affected by SB 186 and SB 102 faces interesting choices. South Dakota’s Republican legislators and Governor must decide if they are willing to give up their decade-long resistance to this key component of Obamacare and accept temporary incentives (“Biden bucks!” cries Rep. Jon Hansen) and hundreds of millions of dollars in ongoing federal support that would stimulate South Dakota’s economy, balance our budget, and cover 42,000 South Dakotans’ medical care. (Wait—remind me again why that’s a hard choice?)

South Dakotans Decide Healthcare, the hospital lobby has to decide whether it will accept this compromise from Senator Steinhauer and forgo the effort to protect Medicaid expansion from Legislative sabotage. And if SB 186 passes, Dakotans for Health* will have to decide if the Legislature’s action is enough or if South Dakotans need to vote on a somewhat beefier initiated measure to expand Medicaid.

[*Financial Disclosure: Dakotans for Health, the ballot question committee that failed to place a competing Medicaid expansion amendment on the ballot and is now circulating an initiated measure petition for Medicaid expansion, pays me money to consult. They are not paying me to write this blog post, but you may take with however many grains of salt you see fit the independence of my analysis here from my financial interest.]