SD Congressional Delegation Wants Competition Back In Healthcare Insurance Marketplace

Jul 25, 2017

Credit Kealey Bultena / SDPB

South Dakota’s congressional delegation is still intent to repeal and replace the Affordable Care Act, or Obamacare.

Healthcare leaders in South Dakota say congressional legislative proposals could hurt the state.

Barb Storbeck helps people enroll for health insurance through the exchange set up by the Affordable Care Act.

She says many of her clients were getting health insurance for the first time.

“Most of them, the emergency room was their primary source of healthcare, so to have access to preventative services and affordable health insurance was really a bonus for them,” Storbeck says.

Storbeck says the ACA can be divided up into three parts: individual coverage, required employer coverage, and Medicaid.

Storbeck says the individual coverage exchange is designed for rural states like South Dakota.

“That group of people that can afford to pay for some insurance, but don’t have access to it in any other way, are small business owners, ranchers, farmers, people working two part time jobs, that’s the group of people that the Affordable Care Act sets up to help,” Storbeck says.

This year almost 30,000 South Dakotans signed up for coverage through the exchange.

Those people got to choose coverage plans from two different providers, either Avera or Sanford.  Before the ACA became law, South Dakota had as many as 17 individual health carriers. In 2014, when the ACA exchange first opened for enrollment, South Dakotans had just three companies to choose from.

That’s part of what’s prompting Congresswoman Kristi Noem to repeal Obamacare.

During a recent town hall in Rapid City, Noem said the goal with healthcare reform is to make the insurance industry more competitive again.

“Obviously the fewer companies you have offering options, the fewer options people are going to have,” Noem says. “I’d like to see us return to those days where we have more companies come in to offer products to South Dakotans.”

Noem says insurance companies across the country are pulling out of state marketplaces because they can’t charge premiums that cover the cost of care. That includes required coverage for pre-existing conditions.

But others say it was not Obamacare that forced insurers out of the marketplace and reduced competition.

Rick Weiland is a Democrat from Sioux Falls. He ran for one of South Dakota’s  US Senate seats in 2014. He says even before the ACA was enacted, the state’s health insurance marketplace had problems.

“Insurance companies looked for every reason they could find to deny coverage or to jack the premiums so high that it was unaffordable," Weiland says. "We had a lot of people without health insurance. They were still getting coverage, usually in the emergency rooms of our hospitals.”

Wieland says the result affected health insurance for everyone.

“Those costs were shifted to people who had health insurance, and their premiums were skyrocketing," Weiland says. "So, it’s been a mess for a long time.”

Weiland says both political parties should work together to fix the law.

To cover as many American’s as it could, Obamacare set up a healthcare exchange to provide coverage where expanded Medicaid ended. South Dakota was one of 19 states that did not expand Medicaid coverage. That leaves around 50,000 South Dakotans in what’s called a gap—those who make too little to afford insurance provided through the exchange, but too much to qualify for Medicaid.

Both the state and federal government split the cost of Medicaid, with the federal share picking up a little more than half of the burden.

If South Dakota had expanded Medicaid, the state would have been responsible for 10 percent of the cost, while adding 50,000 South Dakotans in the coverage gap.

 Governor Dennis Daugaard says that would have cost the state $57 million it didn’t have.

“It really is irresponsible to say we’re going to expand if we don’t have the money to pay for our share,” Daugaard says.

So the state worked out an agreement. The deal was the federal government would pay $90 million dollars, instead of the state, for healthcare for Native Americans.

“So, if we could recapture that $90 million dollars, there’s the $57 [million] and then some to cover our share for Medicaid expansion," Daugaard says. "So at that point I said, ‘Eureka! This could work. Now let’s work toward that end.’”

But, it never happened.

Daugaard was unable to garner the necessary votes in the statehouse to expand Medicaid. Then, following the November election, Vice President Mike Pence advised the states that hadn’t expanded Medicaid to hold off.

So, the state is in the same place it was before. Those 50,000 South Dakotans who didn’t have healthcare coverage still won’t.

Scott Duke is the president of the South Dakota Association of Healthcare Organizations. He says those without health insurance, or those who can’t afford it, will continue to turn to emergency rooms as their primary source of care.

Duke says that’s a problem for hospitals across the state because it resulted in $133 million dollars in uncompensated care last year.

“We’ve seen that number with the provisions around the ACA and the exchanges drop, even though we haven’t expanded. What happens is the repeal without the proper repair--replace mechanisms, we expect to see those provisions and uncompensated care and bad debt go back up as a result of less people having coverage,” Duke says.

Duke says that expense gets shifted to insurers, who then pass the cost on to their customers.

Right now, the future of the Affordable Care Act is uncertain. Senate Republicans have failed to secure the necessary votes for both a repeal or a replacement of Obamacare.

Republican Senator Mike Rounds says the law needs to change.

“We’ve got a plan right now... that’s truly breaking up under its own weight," Rounds says of Obamacare.

Rounds says it takes three years for changes to healthcare law to take effect. That’s because states will have to rewrite their statutes to accommodate new federal laws.

But Obamacare is still the current law.

Barb Storbeck, who helps people enroll for healthcare in South Dakota. She’s planning ahead to this fall’s enrollment period. This year’s window is shorter. She says that could be detrimental.

“Our enrollment period used to be from November 1, to January 31. We are only going to be from November 1 to December 15," Storbeck says. "So we’re going to only have six weeks instead of 12 to get everyone enrolled.”

Storbeck says that means folks should sign up early.