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Understanding the 'coverage gap' in Medicaid eligibility

The interview posted above is from SDPB's daily public affairs show, In the Moment with Lori Walsh.

In South Dakota, Medicaid eligibility is limited to specific low-income groups.

In November, voters will decide whether to expand Medicaid in South Dakota and include more people for eligibility. Amendment D would require the state to provide Medicaid benefits to adults between 18 and 65 with incomes below 138% of the federal poverty level.

About 16,000 South Dakota adults are uninsured because they earn too much to be eligible for Medicaid but are still earning below the lower limit to qualify for Marketplace subsidies, according todata from the Kaiser Family Foundation. Those federal subsidies help make health insurance premiums more affordable.

This is what’s commonly called the “coverage gap.” People who live in the gap still get sick and incur medical bills — which they often can’t pay.

David Benson is with the American Cancer Society Cancer Action Network. He says it’s important to tell human stories about the people expansion would help.

“They’re hard-working South Dakotans," Benson says. "They’re neighbors we see at church. They’re individuals working in front of us and with us in various capacities who, through no fault of their own, are faced with an incredible challenge and difficulty. They're trying to get back on their feet.”

Lee Schoenbeck is a South Dakota senator from District 5. He says expanding Medicaid now would encourage further expansions (and expenses) in the future. He's concerned expansion would discourage employment at a time when South Dakota faces a labor shortage.

“I think people decide whether they deserve health care. They decide it by the choices they make every day about whether they get up and go get a job or not," says Schoenbeck. "The fiscal consequences to the state are not positive, unless you are assuming that the feds will keep subsidizing it at that rate — which, they might, based upon what’s going on in Washington. There doesn’t appear to be any sense of fiscal responsibility. ”

The South Dakota Legislative Research Council says Amendment D would save more than 63 million general fund dollars in the first year of expansion. That’s largely due to a two-year subsidy from the American Rescue Plan. LRC estimates general fund savings in year five of expansion to be more than $11 million.

Voters will decide the outcome of Amendment D in November.

Lori Walsh is the host and senior producer of In the Moment.