- Associated Press - Friday, January 31, 2014

PIERRE, S.D. (AP) - South Dakota Gov. Dennis Daugaard said Friday he will once again ask federal officials to let South Dakota expand its Medicaid program in a way that would provide medical services only to those most in need.

The Republican governor made a similar request last year, but U.S. Health and Human Services Secretary Kathleen Sebelius turned it down. Daugaard said federal officials now may be more willing to let the state expand Medicaid to cover a smaller group of people than envisioned in the federal health overhaul law.

“I want to keep that conversation going,” Daugaard said.

The federal health overhaul gives states the option of expanding Medicaid to cover people earning up to 138 percent of the federal poverty level. Daugaard wants to expand eligibility only up to 100 percent of the poverty level because those above that mark can buy subsidized private insurance through the new health care law.

Daugaard sent a letter Friday asking Sebelius if she would consider such a partial expansion of Medicaid. If she approves, the state budget passed by the Legislature in March could make provisions for expanding Medicaid, subject to federal approval of a detailed agreement.

The governor’s letter says South Dakota is interested in providing Medicaid coverage to people earning less than 100 percent of the poverty level who are working or have lost jobs in the past 12 months. He said the proposal was developed after meetings with Republican legislative leaders.

Daugaard said South Dakotans believe in self-reliance, hard work and perseverance, so those earning above 100 percent of the poverty level should buy subsidized insurance through the federally operated online exchange.

“We want to help those who can’t help themselves. Those who can help themselves should,” he said.

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

People earning up to 138 percent of the poverty level - about $16,000 for a single person or $33,000 for a family of four - would be covered by a full 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.

An expansion to 100 percent of the poverty level would cover a single person earning up to about $11,700 and a family of four earning $23,850.

Senate Majority Leader Tim Rave, R-Baltic, said he wants to provide Medicaid coverage to people most in need. One example would be a single parent with kids who works but cannot afford to buy insurance, he said.

“It’s the right thing to do to try and help the most needy in South Dakota,” Rave said. “We’re looking for something that is a common sense, conservative approach to helping those South Dakotans who are working hard but just having a hard time making ends meet.”

House Minority Leader Bernie Hunhoff, D-Yankton, said Democrats would prefer to expand Medicaid to cover everyone up to 138 percent of the poverty level but said the governor’s proposal would be a good start.

“Half a loaf is better than nothing,” Hunhoff said.

Hunhoff said he hopes the governor’s proposal does not impose a work requirement on those who get Medicaid under an expansion. Many low-income people cannot find jobs because of disabilities or other problems, he said.

Daugaard said he still worries that the federal government will be unable to fulfill its promise to pay most of the cost of expanding Medicaid.

“I’m concerned about the ability of the federal government to control itself and its spending,” he said.

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