The Legislature’s interim Study Committee on County Funding and Services held its second meeting yesterday. A presentation on the money counties spend on healthcare prompted Senator Jim Bolin (R-16/Canton), a staunch opponent of Medicaid expansion, to acknowledge one positive local budget effect of South Dakota’s newly voter-expanded health coverage for low-income people:
Another presentation Wednesday was on public healthcare subsidized by counties. Ray Koens of Minnehaha County said medical expenses had trended down from 2010 to 2019, but COVID-19 disrupted that decline.
Koens said the decision by South Dakota voters to expand Medicaid eligibility to 138% of the federal poverty level would further reduce demand for healthcare subsidies. Republican Sen. Jim Bolin said Medicaid expansion meant that state and federal governments now would be paying those costs rather than counties [Bob Mercer, “South Dakota Didn’t Seek Cyber-Protection Grant,” KELO-TV, 2023.07.12].
Shifting indigent health care costs from counties to state/federal Medicaid won’t solve counties’ budget stress. Over the ten years pre-covid, counties spent a total of $24.2 million on indigent health care. Those costs declined throughout the 2010s, thanks in part to the Affordable Care Act. But over the same period, county jail medical expenses grew and totaled $36.2 million. Medicaid’s inmate exclusion policy will prevent counties from shifting those jail medical costs to the Medicaid expansion rolls.
(For perspective, the Department of Legislative Audit reported to the committee yesterday that county general fund expenditures in 2019 totaled over $389 million.)
But Medicaid expansion may indirectly reduce those county jail medical costs by keeping people out of jail:
In states with Medicaid expansion (i.e., where eligibility is based solely on income), there have been correlated reductions in crime rates and arrests. Compared to counties in states that had not implemented expanded Medicaid coverage, counties in states with Medicaid expansion saw a 25% decrease in drug arrests, a 19% decrease in “violent offense” arrests, and a 24% decrease in “low-level” offense arrests. Looking at more specific types of crimes, researchers also found a 3.7% to 7.5% decrease in burglary, motor vehicle theft, robbery, and violent crime rates in counties with statewide Medicaid expansion.
Increased access to healthcare through Medicaid coverage also reduces recidivism. Prior to the Affordable Care Act (ACA), there were eligibility requirements that restricted Medicaid eligibility for formerly incarcerated people, but with expanded Medicaid coverage, most previously incarcerated people who meet the necessary income criteria are eligible for Medicaid. A study published in 2022 found that expanded Medicaid coverage resulted in significant reductions in the rate of rearrest, with a 16% reduction in arrests for violent crime for two years following release [Emily Widra, “Why States Should Change Medicaid Rules to Cover People Leaving Prison,” Prison Policy Initiative, 2022.11.28].
One of the causes of this interesting and salutary effect appears to be that more people with drug problems can afford to seek treatment and thus avoid getting arrested for their addictions.
So Senator Jim Bolin may be right in more ways than he thought. His interim committee may find that by expanding Medicaid, voters have already done a significant amount of the committee’s work for them by reducing both indigent and jail medical costs for counties.