- Associated Press - Friday, January 24, 2014

PIERRE, S.D. (AP) - South Dakota legislative leaders from both parties said Friday they are discussing the possibility of expanding the Medicaid program to provide medical care for additional poor people, but much depends on how much flexibility federal officials would give the state in designing an expansion.

Rep. Bernie Hunhoff, leader of the House Democratic minority, said discussions have focused on expanding Medicaid coverage only to those most in need and providing that an expansion would be halted if the federal government fails to meet its promise to pay most of the cost.

“Change never comes easy,” said Hunhoff, of Yankton. “I’m still confident we can do something on Medicaid this session.”

Rep. Justin Cronin, of Gettysburg, assistant leader of the House Republican majority, said federal officials so far have been reluctant to give states flexibility in expanding Medicaid. He said he continues to get a lot of phone calls and emails encouraging Medicaid expansion.

“The discussions are definitely happening. We wouldn’t be good stewards of the state if we weren’t talking about options for what we can and can’t do,” Cronin said.

Lawmakers doubt the Legislature would expand Medicaid to the full extent envisioned in the federal health care overhaul, but they are talking about seeking federal approval to extend coverage to a smaller group of low-income people.

Federal officials last year rejected Gov. Dennis Daugaard’s request to expand Medicaid only to a limited group. Daugaard has recommended that South Dakota not expand Medicaid, at least for now. The Republican governor has said the federal government is having trouble putting the health care overhaul into effect and he doubts it can meet its promise to pay the bulk of the Medicaid expansion costs.

South Dakota’s Medicaid program now covers about 116,000 children, adults and disabled people. The expanded eligibility would add an estimated 48,000 people, mostly adults without children.

People earning up to 138 percent of the poverty level - $15,451 for a single person or $31,809 for a family of four - would be covered by an expansion. The federal government would fully cover those added to Medicaid rolls through 2016, and the state’s contribution would rise in stages to 10 percent of the costs by 2020.

Daugaard last year asked that South Dakota be allowed to expand Medicaid eligibility only up to 100 percent of the poverty level because those above that mark can qualify for subsidized private insurance under the health care overhaul. Federal officials rejected his request.

Hunhoff said legislators will begin to draft Medicaid proposals in the next week, probably including requests for a federal waiver to expand only to 100 percent of the poverty level.

The Democrat said a full Medicaid expansion would bring $300 million in federal funding a year into the state, helping many poor people who cannot afford private insurance and saving some rural hospitals and clinics.

Cronin said if federal officials want states to expand Medicaid, they should give each state some flexibility in how that is done.

“They also need to understand we run our state how we think it should best be run,” Cronin said.