Governor: SD Will Not Establish State Insurance Exchange

Sep 26, 2012

South Dakota won’t establish its own health insurance exchange. That’s the decision from Governor Dennis Daugaard. The Affordable Care Act requires each state have an exchange in place by 2014, and all states have the option of creating their own or using one set up at the federal level.

A health insurance exchange, in basic concept, is a marketplace for health insurance. People can see available choices, what benefits make up different plans, and how much those options cost. Current federal law requires states have a health insurance exchange by 20-14. Cindy Morrison is vice president of public policy at Sanford Health.

"Now, these health insurance exchanges will be funding through 20-15 by the federal government. And then after 2015 these exchanges need to be self-sustaining," Morrison says.

Morrison says opting for the federal plan largely eliminates input from the state, its companies, and South Dakota consumers. She says health organizations would rather see a state-based exchange.

"Having this local control is important, and also knowing that when there’s a concern or how you’re going to put something together, I think states prefer to do that with people that they know versus having that come out of Baltimore," Morrison says. "So I think in an industry like health care where you’re heavily regulated, you would much prefer to solve problems and work with people at a local level versus working with someone that resides in another state."

Morrison says the decision limits the influence South Dakotans have on the policies of a health insurance exchange because it’s run by the federal government.

Governor Dennis Daugaard says the cost of operating an exchange in South Dakota is so expensive the state would have to charge participants or raise taxes, so the state must choose the federal plan. Daugaard says the state retains control over the regulation of health insurance.

Govenor Dennis Daugaard explains his reasoning for the decision live on Thursday, September 27's  Dakota Midday. That airs at 12 p.m. CT/11 a.m. MT. You can also hear from a Washington, D.C. research professor about health insurance exchanges.