In South Dakota, Medicaid Expansion May Be Up to Voters

In states that have not expanded Medicaid, it’s not for lack of options on how to enact expansion. States have used multiple options to expand Medicaid, including legislation, executive action, and voter-led actions.

In South Dakota, ​​one of the twelve remaining states that has yet to expand Medicaid, lawmakers put forward legislation earlier this year to expand Medicaid through state statute. After the Health and Human Services Committee passed the legislation, the Senate rejected Senate Bill 186. Efforts to expand Medicaid are not over, though. Proponents of expansion in South Dakota, prepared for this possibility, have been gearing up for a ballot initiative on Medicaid expansion.

A ballot initiative puts the question of Medicaid expansion to the voters directly. The process for ballot initiatives varies from state to state, but generally for an initiative to get on a ballot, a certain number of signatures have to be collected. Once on the ballot, if the initiative receives enough votes, it becomes law. Ballot initiatives have been an effective option to achieve Medicaid expansion, leading to successes in Maine, Idaho, Utah, Nebraska, Oklahoma, and Missouri. Advocates in South Dakota are hoping to join these states, with signatures collected, and a ballot initiative set to appear on the ballot in November this year.

However, attempts to prevent expansion by opponents are ongoing. Another ballot initiative, proposed by state legislators, that would make it harder to pass the Medicaid expansion initiative is set to appear on the ballot in June this year. This proposal would increase the threshold needed to pass to 60% (from a simple majority of 50% plus 1) for any ballot initiatives that would increase taxes or would require the states to appropriate $10 million or more in the first five fiscal years. Not only was this proposal, which passed by a margin of only one vote, motivated by the Medicaid ballot initiative, it was expedited through the legislature to ensure it would apply to pending ballot initiative campaigns.

This is not the first time ballot initiatives have been challenged by state political leadership as state advocates have tried to use this pathway to expand Medicaid. A ballot initiative process that began in Mississippi last year to expand Medicaid was halted when the state’s Supreme Court determined that the ballot initiative process is “unworkable and inoperative” due to changes from the state’s congressional reapportionment that conflict with procedures for ballot initiatives set out in the Mississippi Constitution. It’s up to the legislature now to remedy this, but it leaves the earliest possible date for a new ballot initiative at November 2024.

South Dakota has a lot to gain from expanding Medicaid. With financial incentives from the American Rescue Plan Act of 2021, the state’s budget would gain an estimated $60 million over two years. More than 27,000 adults would gain coverage, or 42% of the state’s uninsured nonelderly adult population. Even without these additional financial incentives, expanding Medicaid has actually produced net savings for many states, and many states that have expanded Medicaid spend less on Medicaid overall, compared to non-expansion states. In fact, South Dakota’s neighbor Montana, (which expanded Medicaid in 2016) spends a lower proportion of their state general fund on Medicaid compared to South Dakota (12% versus 20%), according to a report published last month.

The movement on the ballot initiative to expand Medicaid in South Dakota makes one thing clear: voters want expanded Medicaid eligibility, and they are willing to work for it even when legislative and executive attempts fail.