Medicaid eligibility and enrollment in South Dakota

Many Medicare beneficiaries receive Medicaid’s help with paying for Medicare premiums, affording prescription drug costs, and covering expenses not covered by Medicare – such as long-term care.

Our guide to financial assistance for Medicare enrollees in South Dakota includes overviews of these benefits, including Medicare Savings Programs, long-term care coverage, and eligibility guidelines for assistance.

Throughout the COVID pandemic, from March 2020 through March 2023, states were not allowed to disenroll anyone from Medicaid, even if they no longer met the eligibility criteria (some states chose to apply this continuous coverage rule to their CHIP populations as well, but South Dakota did not). The federal continuous coverage requirement ended March 31, 2023, and states could resume routine disenrollments as early as April 1. The end of the continuous coverage rule is being referred to as “unwinding,” and it’s expected to take a year for states to process eligibility redeterminations for everyone enrolled in Medicaid.

South Dakota opted to begin the return to normal eligibility redeterminations and disenrollments as soon as allowed under federal rules, with renewal processing beginning in February 2023 and disenrollments possible as of April 1 (only four other states opted to have their initial round of disenrollments effective in April).

According to South Dakota’s enrollment data page, total Medicaid enrollment dropped from 152,987 in March to 139,770 in April, and to 131,627 in May. So in just the first two months, enrollment had dropped by more than 21,000 people, amounting to nearly 14% of the people who had Medicaid in March. But as noted above, some of those people are likely eligible for Medicaid again now that expanded eligibility rules for adults have taken effect.

An enrollee’s coverage will continue until their renewal date, even if they no longer meet the eligibility guidelines. South Dakota expects to take nine months to work through all of the renewals for people who are most likely to no longer be eligible for Medicaid, so some enrollees who are no longer eligible will not have their renewal processed until late 2023. The state had noted that they had about 22,000 enrollees who “appear ineligible” for Medicaid. But before they can be removed from the program, their ineligibility has to be verified.

For each month’s renewals, the state will first try to auto-renew coverage based on existing data. But for those whose coverage cannot be auto-renewed, the state will send a renewal packet (marked “urgent”) with instructions for completing the renewal on paper, online, over the phone, or in person at a county office. The packet will be sent out about six weeks before the coverage is due to renew.

South Dakota is in a unique position during the unwinding process, as Medicaid expansion took effect in the state in July 2023, just three months after the first round of disenrollments due to the end of the COVID-related continuous coverage rule. Some people who lost Medicaid in April, May, or June will find that they’re once again eligible for Medicaid starting in July, under the new expansion rules (for those whose renewal date is July or later, they would not lose coverage in that case, but would simply transition to the Medicaid expansion eligibility category). So for those individuals, the state was screening for potential eligibility under the expansion guidelines and letting the person know that they should reapply starting in June (for coverage effective July 1). Reminder notices about this were sent to these individuals in June.

People who are no longer eligible for Medicaid will generally find that they can either enroll in an employer’s plan (if available), or sign up for a plan through the South Dakota marketplace/exchange. Most exchange enrollees qualify for substantial income-based subsidies to offset the cost of their coverage (and in some cases, their out-of-pocket costs).

No, although the state sought federal approval to implement a work requirement. Instead of expanding Medicaid during any of the legislative sessions since 2010, South Dakota opted to seek federal approval for a pilot program work requirement for low-income parents in the existing Medicaid program (the pilot program would have applied in just two counties initially).

Former Governor Dennis Daugaard laid out the details of the work requirement in his State of the State address in January 2018, and the state published the proposed waiver application in May 2018. The waiver proposal has been pending CMS approval since 2018, but the Biden administration notified states in 2021 that Medicaid work requirements were essentially a non-starter; all of the previously approved work requirements were revoked by the Biden administration in 2021, and no pending work requirement proposals have been approved. South Dakota began voluntary enrollment in the Career Connector program in July 2018.

South Dakota’s Medicaid program became effective in October 1967, nearly two years after Medicaid was created. For many states, 2014 represented a significant shift in eligibility, particularly for childless adults. However, South Dakota Medicaid eligibility guidelines have not yet changed under the ACA. Non-disabled childless adults are ineligible for Medicaid, regardless of how low their incomes are. But as noted above, that might change after voters have an opportunity to weigh in on Medicaid expansion on the 2022 ballot.

South Dakota expanded Medicaid in July 2023, nearly a decade after Medicaid expansion took effect in many other states. Former Governor Dennis Daugaard supported Medicaid expansion by 2015 (after initially opposing it), but the issue did not have lawmakers’ support. Current Governor Kristi Noem is opposed to Medicaid expansion, and the legislature has also continued to oppose Medicaid expansion. But as has been the case in every other state where voters got to weigh in directly on the issue, South Dakota voters approved a constitutional amendment (Amendment D) to expand Medicaid eligibility as called for in the ACA.

South Dakota officials announced in September 2015 that their proposal to expand Medicaid had received “an initial go-ahead” from HHS. then-Governor Dennis Daugaard’s senior advisor Kim Malsam-Rysdon noted that the plan was still preliminary, but it appeared promising and would have expanded eligibility to far more people than the state’s 2014 proposal, which would only have expanded coverage to residents with incomes below the poverty level (HHS rejected that proposal, as Medicaid expansion capped at the poverty level — but with the enhanced federal Medicaid expansion funding match — was a non-starter under the Obama administration, and was also rejected by the Trump administration when proposed by Utah and Georgia).

Although states that expanded Medicaid are paying 10% of the cost, Daugaard noted that his proposal would have ended up being a financial net positive for the state. That’s because he was working with the federal government and Native American tribal leaders to use Medicaid funding for Native Americans who would become eligible for expanded Medicaid and who receive treatment outside of Indian Health Services (IHS) facilities. Those costs are covered in part by the state, and Daugaard said that South Dakota would save more there than it would spend on its portion of the Medicaid expansion costs. Daugaard said that he wouldn’t continue his push for Medicaid expansion if it ended up needing additional money from the state’s general fund.

In December 2015, Governor Daugaard explained the details of his $4.8 billion budget proposal, including his proposal to expand Medicaid to cover 55,000 people who weren’t currently eligible. Daugaard said that the state should “seize the opportunity” to use federal funding to expand coverage, if possible.

In February 2016, HHS agreed to establish arrangements under which non-IHS providers could enter into “care coordination agreements” with IHS facilities, and Native Americans enrolled in Medicaid would be able to receive care at those non-IHS facilities and the full cost would be covered by federal Medicaid funds (as opposed to the state paying a portion and the federal government paying a portion). But Daugaard noted that the practical implementation of the new HHS provision could be complicated, and that there was still work to be done to determine whether the savings from the new IHS rule would save enough money to make Medicaid expansion budget-neutral in South Dakota.

A few days later, Daugaard said that it was too late in the 2016 legislative session to get the ball rolling on Medicaid expansion, and said that he would remove Medicaid expansion from his proposed budget. He indicated that a special session was a possibility, but that waiting until the 2017 legislative session was also a possibility. In June 2016, Daugaard confirmed that the issue would have to wait until the 2017 legislative session, as he was opting not to call a special session in 2016.

In early 2017, in his State of the State address, Daugaard noted that he was optimistic about working with the Trump administration to ensure that the federal government would begin to fully fund medical care for Native Americans, regardless of where the care was provided, without requiring “health care providers to jump through several hoops,” as he believed the Obama-era arrangement did. He did not mention Medicaid expansion in that address.

The issue of Medicaid expansion was essentially off the table in South Dakota as of early 2017. The coalition tasked with recommending how the state should expand coverage updated their conclusions in December 2016 to note that Governor Daugaard was no longer recommending Medicaid expansion for 2017, in light of the incoming Trump administration’s plans to overhaul Medicaid nationwide with block grants or per-capita allotments. Ultimately, that did not come to pass at the federal level, but no progress was made toward Medicaid expansion in South Dakota in the meantime.

Kristi Noem took office as governor in 2019, and opposes Medicaid expansion. But voters in the state had an opportunity to decide the matter for themselves on the 2022 ballot, and they approved Medicaid expansion. Most of the states that have expanded Medicaid have done so via legislation. But as time goes on and lawmakers and/or governors in a dwindling number of states continue to reject federal funding to expand Medicaid, the issue is increasingly being taken directly to voters.

In order to get the measure on the ballot, Medicaid expansion supporters in South Dakota gathered more than 38,000 signatures. There were concerns that the measure might need 60% approval to pass, as voters also had the opportunity to vote on South Dakota Constitutional Amendment C in the June 2022 primary election. That measure was defeated, but if it had been approved it would have required 60% voter approval for future ballot measures that increased taxes or require the state to appropriate more than $10 million. If voters had approved Amendment C, Amendment D would have needed to be approved by at least 60% of voters in order to pass. But since Amendment C did not pass, Amendment D only needed a simple majority in order to pass (it ultimately got 56% of the vote).