Advocates urge Medicaid expansion, some lawmakers skeptical

PIERRE — South Dakota lawmakers heard an hour and a half of emotional testimony from advocates of expanding Medicaid to cover thousands of uninsured citizens, but many remained skeptical.

In a special joint hearing of the Legislature’s two Health and Human Services committees, medical professionals, hospital executives, religious leaders, county officials and people without insurance cast expanding Medicaid as morally and economically needed.

“Medicaid expansion is the best way to serve the low-income individuals,” said John Mengenhausen, CEO of Horizon Health Care of Howard. “Medicaid is also the least expensive way for the government to ensure that they’re providing health care for this population.”

Under the 2009 federal Patient Protection and Affordable Care Act, states are called on to expand Medicaid eligibility up to 138 percent of the federal poverty line starting on Jan. 1, 2014. Due to a Supreme Court ruling upholding most of the act as constitutional, however, states have a choice about whether to expand Medicaid. The federal government, under the law, will pay 100 percent of the added Medicaid cost for the next three years, then 90 percent after that.

An estimated 48,000 South Dakotans are currently uninsured with incomes under 138 percent of poverty. But around half of them would be eligible for subsidized insurance on the new health care exchanges.

Several people testified about how many uninsured are hard workers with families who have trouble making ends meet.

“These people are not lazy. They are not deadbeats. They’re not milking the system,” said Linda Sandvik, a Rapid City nurse.

Kathy Ruggles of Pierre told of refusing to seek needed medical care because of fears about the cost.

“Hospitalization is out of the question for many of us,” Ruggles said, speaking for “the poor people of South Dakota.” 

“It is bankruptcy waiting to happen. We risk have what little property we possess, such as our cars, seized for payment.”

Hospital leaders told lawmakers they were scheduled to absorb millions of dollars in cuts over the next decade as part of the Affordable Care Act. Expanding Medicaid would make up part of that shortfall, they said, by covering treatment currently paid for by the hospitals as charity care for the poor.

Two conservative activists testified against expanding Medicaid, with Florence Thompson of Caputa warning the Affordable Care Act would lead to shortages of doctors and drugs. 

“I urge our state to be a leader and say ‘No, we’re going to have the free market,’” said Stephanie Strong of Rapid City.

It’s unclear how many lawmakers’ minds were changed by the 90 minutes of testimony. Several said they remain opposed to expanding Medicaid.

“I will resist an expansion of Medicaid in the state. I think it would be insane,” said Sen. Phil Jensen, R-Rapid City.

Rep. Steve Hickey, R-Sioux Falls, said he’s torn on the issue.

“Your arguments are compelling,” Hickey said to proponents of expanding Medicaid, adding that he believes South Dakotans are “paying for this either way” by hospitals who shift the cost of care for the uninsured to other patients.

But Hickey said he worries expanding Medicaid is a way for health care companies to get richer, and that undeserving “bums” will get subsidized health care along with hard-working families.

Rep. Manny Steele, R-Sioux Falls, conceded that expanding Medicaid would help a lot of people with what he termed a “major problem.” But he said the cost to an indebted country of paying for the coverage would prove too much.

“I think we need to go back to the drawing board and come up with some new ideas on this,” said Steele. “On a temporary basis, this would help people who need to be helped. But on the long-term basis we’re looking at a disaster.”

Several lawmakers spoke out in favor of the expansion. Rep. Troy Heinert, D-Mission, told the committee his own family has been unable to find health insurance. Rep. Karen Soli, D-Sioux Falls, said she has concerns about expanding Medicaid but ultimately sees it as an obvious choice.

“There is no part of me that could not support this,” she said.

The joint committee took no action on expanding Medicaid Wednesday. There are several options for lawmakers if they choose to expand Medicaid, by amending existing bills. The Legislature could also do nothing this year and revisit the issue in 2014.

(UPDATE: This post has been updated to clarify a statement of Rep. Steve Hickey.)