Press "Enter" to skip to content

Noem Inflates Cost of Medicaid Expansion, Lies About Need for Taxes to Pay for It

The undercard to Governor Kristi Noem’s BS-fest on CNN Sunday was her lies about Medicaid expansion.

CNN’s Dana Bash actually asked the Governor about Medicaid expansion before turning to the headline issue of abortion, raped ten-year-olds, federalism. Bash led the interview by investigating what practical policies, if any, Noem would pursue to follow through with her promise to “walk alongside pregnant moms” to help them through the Alito Court’s world of forced motherhood. Bash suggested Medicaid expansion, which is on South Dakota’s ballot this November, would be part of that walk:

BASH: Thousands of low-income women in South Dakota without health insurance could be covered during and after pregnancy if your state expanded Medicaid under Obamacare.

This is going to be on the ballot there in South Dakota in November. Will you support that?

NOEM: I think it’s interesting, because what that does is make sure that Medicaid expansion would cover able-bodied single individuals that are able to work. And it also would include about an $80 million cost to the state.

So that will be a debate that will be on the ballot. If it passes, I will certainly make sure that it’s implemented fairly and that it’s done fairly. It’s something that I will continue to look at. That cost to the state is incredible. And the people that it covers are people that are single and able-bodied and able to work.

We have many open jobs, very few people in our state that are on unemployment right now.

BASH: Will you…

NOEM: And our incomes are going up faster here in South Dakota than anywhere else in the country.

So the people of South Dakota economically are doing better, even though we’re really struggling with the inflation of the Biden economy and what’s been happening with the policies out of D.C.

BASH: Just real quick, it’s on the ballot. You’re a voter, obviously. Will you vote for it?

NOEM: I won’t be voting for it myself personally because of the tax increases that would have to happen to pay for it.

But if it is passed by the people, I certainly will implement it [Gov. Kristi Noem, interviewed by Dana Bash, transcript, CNN: State of the Union, 2022.07.03].

Never mind Noem’s contradictory effort to wedge her base-rousing Biden-bashing talking points into a question on South Dakota policy (if incomes are rising so fast in South Dakota, then Medicaid expansion won’t cost much, because fewer people will need it, and all those rising incomes will easily bear whatever costs may accrue to the state; if we’re struggling with pandemic-rebound/Putin-flation, then it’s all the more urgent that we expand Medicaid to make sure the folks at the losing end of that struggle can afford healthcare). Noem’s ultimate response contains one deflection and two big lies about Medicaid expansion:

  1. The Deflection: “…Medicaid expansion would cover able-bodied single individuals that are able to work.” There’s a hilarious callback here to Noem’s new Lifey website, which lists getting a job as the first source of financial assistance that expecting moms should pursue. But there’s also the devious deflection that Noem and other Republicans have used to imply that Medicaid expansion only helps lazy bums stay lazy. The sad fact is that there are lots of able-bodied people holding down jobs (not to mention caring for kids and/or elderly parents) who don’t get health coverage from their jobs and who can’t afford healthcare with their meager wages. Expanding Medicaid actually makes it easier for those able-bodied individuals to stay healthy and find and keep jobs.
  2. The First Lie: Medicaid expansion “would include about an $80 million cost to the state.” Out of whose backside did Noem pull that figure? South Dakota has two Medicaid expansion measures on this year’s ballot, Initiated Measure 28 and Amendment D. The fiscal note for Initiated Measure 28 says Medicaid expansion would require South Dakota to chip in up to $20.8 million per year. The fiscal note for Amendment D says the annual cost to the state would be $33.2 million. $80 million hasn’t come up anywhere in any discussion of expanding Medicaid in South Dakota. Noem is just throwing around sourceless and exaggerated numbers to excuse her refusal to walk with women and other low-income South Dakotans and help them get health care.
  3. The Second Lie: “…[T]ax increases…would have to happen to pay for” Medicaid expansion. Horsehockey! 38 states and D.C. have expanded Medicaid under the Affordable Care Act. Some states raised taxes to pay for their costs; some states have not. So tax increases obviously do not have to happen to pay for Medicaid expansion. Furthermore, the fiscal note for Amendment D notes that Medicaid expansion would produce cost savings that would cover 98% of the state’s Medicaid expansion costs. So the net annual cost to South Dakota, based on the D fiscal note, would be $664,000. We can almost pay for that just with the savings from the five positions Mark Vargo and Noem herself have taken off the bloated state payroll in the past month. But we don’t need to fire anyone else, cut any programs, or raise any taxes: many states have found that expanding Medicaid is budget-neutral or even makes money for the state. That’s why not one state that has expanded Medicaid has backed out: the policy works.

Noem has no good policy reason to vote against Medicaid expansion this fall. She can only rationalize her Obamacare Derangement Syndrome by distracting us from the low wages that don’t make health care affordable, making numbers up about the cost of Medicaid expansion, and lying about the need for tax increases to pay for this effective, economically stimulatory, and health-improving policy.

South Dakotans paying attention to facts will turn out in droves to approve Medicaid expansion in November. Then we’ll get to test whether Noem told another lie Sunday when she promised “to certainly make sure that it’s implemented fairly.”

10 Comments

  1. Whitless 2022-07-05 11:43

    Noem’s outrageous lies need to be exposed not only on this forum but also by broadcast and print media in South Dakota. Medicaid expansion is intended to cover the working poor. These are South Dakota citizens who make too much money to qualify for Medicaid, and not enough money to qualify for plans offered through the healthcare market place. Noem falsely implies that Medicaid expansion would cover able bodied individuals who are disinclined to work. That is a complete fabrication. This state has thousands of citizens who are working, whose employers don’t provide health insurance, and who don’t make enough to afford health insurance.
    State Senator Wayne Steinhauer, a conservative Republican and successful businessman, has crunched the numbers and determined that the state’s potential financial responsibility is much less than the inflated number claimed by Noem.

  2. bearcreekbat 2022-07-05 12:02

    Does anyone know whether the fiscal note calculation on Amendment D leading to the statement: “The fiscal note for Amendment D says the annual cost to the state would be $33.2 million,” includes an analysis of the multiplier effect’s economic impact of the 90% contribution (wouldn’t this be around $300 million dollars from the feds into the SD economy) from the federal government on state sales tax revenues?

    The multiplier effect is an economic term, referring to the proportional amount of increase, or decrease, in final income that results from an injection, or withdrawal, of capital. In effect, It measures the impact that a change in economic activity—like investment or spending—will have on the total economic output of something.

    https://www.investopedia.com/terms/m/multipliereffect.asp

  3. Francis Schaffer 2022-07-05 13:35

    Wow such simple questions to be asked with no hope of an answer. I pay taxes to the federal government, Medicaid is a federal government funded program, my governor will not expand Medicaid in South Dakota, Yet other states are receiving money from the expanded Medicaid program from the federal government. Is this federal government which funds Medicaid different than the one to which I pay taxes? Will any county revenue be saved by some working poor being on expanded Medicaid instead of the county paying the local ER bills from citizens who cannot afford the cost of care but need the service of care? I am in favor of increased taxes, just not in favor of stupid decisions to perpetuate a regressive tax system. Please remove, sales tax on food and clothes; let us have an honest discussion about the property tax on commercial property and ag land; implement a income tax system which is well thought out. What possibly could go wrong?

  4. MD 2022-07-05 15:35

    If you’re a 30ish year old female in Pennington County, South Dakota that has to buy their own health insurance policy through the marketplace, it costs $6,120 per year. That policy comes with a $7,800 deductible.
    So, for $6,120, you get a free yearly physical, free birth control, and access to negotiated pricing.
    If you are stuck in the state imposed Medicaid donuthole, that is your cheapest option for insurance. If you’re in the working poor, the premium alone would be enough to bankrupt you, much less having a health care expense.

    Health care is expensive, and it is hard on a state government to pay for (but much easier with the cost sharing under the ACA). Even if they aren’t paying for it, they will pay for it in other ways, such as increased costs of care, charity care, etc. Penny wise and pound foolish.

  5. Jake 2022-07-05 16:55

    Whitless-exactly right on! Instated by caring Democratic President Obama, Expanded Medicare under the Affordable Care Act, aggravates the GOP Republicans to now end. Frothing at the mouth in anger they’ve tried over 50 times to eliminate Obama’s legacy act-against the will of the people (but that doesn’t matter to the GOP). Democrats, with their usual compassion for the less fortunate, passed this like they passed Social Security, Medicaid, school lunches, highways, farm aid, fair taxes for all, etc. Current Republicans look at a proposed bill brought forth with compassion for the lesser of society (jobless, pregnant, the working poor, of skin color other than white and they ‘cluck cluck’ to each other that we can’t afford this! “Taxes, you know”! “Bigger government ‘ya know!”
    In SD, their mindset is never far from that 10% of our population (Native American) that seem to get everything “given” to them! Never stopping to think or consider that their big government at the time (1880’s etc) in order to make a Peace Treaty (the supreme LAW of our land) to end a long war, GAVE ALL of western South Dakota to them for their EXCLUSIVE use. Can any of you “PUBS” deny this fact -or will it just be crickets as usual? The ink used on the Ft. Laramie treaty was scarcely dry when we the government started quickly to break and reduce the promised land mass to the Natives into smaller/ smaller parcels of land for their tribes.
    Noem’s (and her SD GOP cohorts) are firmly against the proposed expansion because of instant knee-jerk reaction of dislike & disdain for any proposal by what they perceive to be “Liberal”-simply because of the mindset of so many to vote for the “R” on a ballot. Even if it were $80 million, if it could be shown in a way her voters would say “That’s a good investment, it would’ve flown into law years back.

  6. Arlo Blundt 2022-07-05 20:19

    Well…the Republicans will be screaming about raising taxes as we go to the polls to vote Medicaid expansion up or down. Most likely, as in the past, South Dakotans will vote for one or both (?-what happens then ?) options on the ballot. People are looking for Health Insurance relief….they want it now. The Republicans will author legislative chaos to implement the Medicaid expansion AND a sales tax increase…whether a sales tax increase is indicated or not. We will continue with a hefty budget surplus.

  7. Cory Allen Heidelberger Post author | 2022-07-06 06:46

    BCB, the Legislative Research Council included a useful, if remarkably extrastatutory, explanation of its fiscal note in its letter to Secretary Barnett. The LRC explains that it estimates general fund savings “including an offset in funds for correctional healthcare, behavioral healthcare, and Indian Health Services, as well as the movement of certain populations from the regular Medicaid group to the expansion group” and “a temporary two-year incentive… provided under the American Rescue Plan Act.” I see no sign in the LRC’s explanation that it considered the economic multiplier effect of those hundreds of millions in stimulus dollars creating additional tax revenue.

    Thus, it is quite possible that the stimulatory effect of the federal funding will generate new tax revenue that will turn the LRC’s modest negative fiscal impact into a sizable positive fiscal impact. That stimulatory effect is part of the reason some states have found they don’t need to raise taxes at all: Medicaid expansion can pay for itself!

  8. Cory Allen Heidelberger Post author | 2022-07-06 06:50

    Jake, MD, yes, South Dakota has been foolishly resisting a very smart investment. Making healthcare affordable invests in workers’ health, happiness, productivity, and spending power. I’d love to be the Governor who could sign Medicaid expansion into law and then at the next election say, “Look at all th good things that happened thanks to the bill I signed!”

Leave a Reply

Your email address will not be published.