South Dakota Once Had 17 Health Providers In The State, Now Two

Aug 9, 2017

Credit Kealey Bultena / SDPB

Before the Affordable Care Act went into effect, South Dakota had as many as 17 individual health insurance providers. Now the state has two, Avera and Sanford.

Conservative state leaders say that happened because Obamacare forced insurers out of the marketplace.

However, the CEO of Avera Health Plans says the state’s market isn’t big enough to host 17 individual health providers.

“Before the Affordable Care Act, South Dakota had 17 insurers offering individual health insurance policies. Now we just have two,” says Governor Dennis Daugaard.

Daugaard says the only reason Avera and Sanford are able to survive in the state is because of their integrated health systems, a cooperation between the two that saves them money.

Daugaard along with South Dakota’s congressional delegation often point to the high water mark of 17 individual health insurance providers Obamacare, now only two, as the litmus test for the law’s shortcomings.

They say the ACA reduced competition, while the cost of premiums went up. The law requires insurers to provide essential benefits and cannot drop anyone for a preexisting condition.

Others say the drop in providers is more complicated.

Debra Muller is the CEO of Avera Health Plan. She says it’s difficult for large carriers to stay in South Dakota because of the state’s small customer base.

“The market that we here most about in South Dakota right now, because we’re a non-expansion state in Medicaid, is the individual market. In that particular market, that’s only seven percent of those who receive health insurance coverage in the state of South Dakota, it’s not that big," Muller says. "So, it’s difficult for a business plan from a large carrier to say, ‘This makes sense to come into the state.’”

Muller says Avera will always welcome competition in South Dakota.

In Washington, Republican efforts to overhaul the healthcare law are on hold during August recess.