PIERRE, S.D. (AP) — South Dakota has done little to carry out President Barack Obama's health care overhaul since it was passed two years ago, and that won't change much no matter how the U.S. Supreme Court rules on the law.
Gov. Dennis Daugaard has delayed the state's work on setting up a health insurance exchange, which would help people and small businesses buy private insurance, to see whether the Supreme Court will throw out the law. Even if the high court upholds the law, the Republican governor says he'll wait until the November election, when he hopes voters will elect a Republican president and Congress that would repeal the measure.
Daugaard wants most or all of the health care law to be struck down or repealed because he believes states should decide such issues.
The federal law seeks to reduce the number of people without insurance by adding more to Medicaid, the state and federal program that pays medical expenses for poor people, and requiring most other people to get private insurance. Daugaard believes it will instead encourage more people to drop their private insurance and move onto the Medicaid rolls.
"It encourages dependence on government-provided insurance instead of encouraging self-reliance," Daugaard said.
Senate Minority Leader Jason Frerichs of Wilmot said he hopes the Supreme Court doesn't throw out the entire law because he supports the goal of getting more people covered by insurance. Regardless of whether the federal law is struck down or repealed, South Dakota should explore setting up a health insurance exchange of its own or in cooperation with other states to help more people buy affordable insurance and get medical care, he said.
"In the end, we still have real people who are affected," Frerichs said.
The Supreme Court could uphold or strike down the entire Affordable Care Act, or just throw out portions of it.
About 105,000 South Dakotans, 13 percent of the state's population, didn't have insurance in 2010, according to the U.S. Census Bureau. But based on their own survey, state officials believe only 71,000, or about 9 percent, are uninsured.
Deb Bowman, a senior adviser to the governor, said about 115,000 South Dakotans are now on Medicaid at a cost to the state of $297 million a year, nearly a quarter of all state spending. The federal health care overhaul would change eligibility requirements to add an additional 54,000 to the program in 2014 — 48,000 newly eligible and the rest those who could be on Medicaid now but haven't signed up, she said.
The federal government would initially cover all costs for the additional people on Medicaid, but the state would have to cover 10 percent of the medical costs by 2019, Bowman said. The extra state cost, including administration, would total $99 million in 2014-2019, she said.
Daugaard and Frerichs agreed the state would not expand eligibility for Medicaid unless forced to do so by the federal law.
Daugaard said if more people qualify for Medicaid, many would drop their private insurance to move to the government program. A requirement that small businesses provide health insurance to employees likely would backfire because businesses could save money by dropping insurance coverage and paying a penalty for doing so, he said.
Frerichs said whatever the fate of the federal law, South Dakota should manage Medicaid to help people leave the program and get private insurance.
"We shouldn't expect them to be there forever," the Democratic Senate leader said.
Dave Hewett, president of the South Dakota Association of Health Care Organizations, said the association of hospitals and other health operations generally supports the federal law because it would reduce the number of people without insurance, patients who often cannot afford to pay for medical care.
South Dakota hospitals provided nearly $44 million in charity care in 2010, up 21 percent from the year before. Hospitals recover such money by charging more to those who are insured, he said.
Thousands of South Dakota residents have benefited from provisions of the federal law that have already taken effect, but they would lose those benefits if the law is struck down in court or repealed in Congress.
Stacie Fredenburg, a spokeswoman for the Community Health Care Association of the Dakotas, said a grant program in the law helps build new community health centers and pay operating expenses for existing ones. The clinics, often located in rural areas that could not support medical clinics without the federal help, would be in trouble if the law is struck down, she said.
"That money would need to be replaced somehow or existing community health centers possibly would be in jeopardy of closing," she said.
Fredenburg said the 44 community health centers in South Dakota treated 58,000 patients last year, including more than 21,000 who were uninsured. Fees are based on a patient's income level.
The health care overhaul has provided grants to open a clinic in Huron and expand a school-based clinic in Rapid City. De Smet just got a grant to build a center, and Yankton and Flandreau have received grants to plan centers, she said.
The U.S. Health and Human Services Department estimated in March that more than 15,600 South Dakota residents on Medicare have saved nearly $10.1 million on prescription drugs, an average of about $645 per person. That money helps people after they hit the prescription drug coverage gap, often called the "doughnut hole."
Federal officials also say about 9,000 young adults in South Dakota have gained insurance coverage under a provision of the law that requires insurance companies to allow those ages 19-25 to remain on their parent's insurance policies.
Hewett said no matter what the Supreme Court rules, the health care overhaul has helped change the way health care is delivered. Hospitals, doctors and others now focus more on keeping people well instead of just treating them when they are sick, he said.
