Wednesday, March 26, 2014

Medicaid, Shmedicaid. I'm Looking At The Bucks Involved--And We're Nuts Not To Take This Expansion Deal From The Feds.

     The numbers speak for themselves.  In this case they shout for themselves.  Between now and 2020, if South Dakota accepts the Medicaid expansion offer that comes as part of the Affordable Care Act, we'll take in $2.1 billion (with a "b")  and shell out $157 million (with an "m").  Health care economics are too complicated to call on here, but a good deal is a good deal, doesn't matter what sector of the economy we're looking at.  The South Dakota Budget and Policy Project out of Sioux Falls has done some comprehensive work on this and it looks to me like the numbers are sound and just too compelling to ignore.  What's frustrating is that Governor Daugaard and a pretty solid phalanx of Republicans in our legislature don't actually ignore them--they trash them with a double dose of political rhetoric.  Some naysaying is aimed at federal budget policies, using our legislature as a platform for making gratuitous political statements about national issues when they should be focused on what's best for South Dakota.   Others, including Governor Daugaard, insist on getting special treatment for South Dakota if expansion were accepted--a shrewd political ploy in that it gives Daugaard and his allies a patina of reasonableness even though it's a foregone conclusion that expansion can't be crafted into state-specific formats, probably by law and certainly by the practical reality involved.  Like it or not, Medicaid is a federal program that has to be administered by a central authority with  uniform guidelines.
     Unless and until somebody comes up with a scheme for the feds to "block grant" Medicaid money (not a bad idea to my way of thinking), we're pretty much stuck with the program that's now in place.   From my Republican perspective this leaves much to be desired in the way of ideological purity, but from my businessman's point of view, it's how the world is.  I'm much more the pragmatist than the ideologue when it comes to matters of public money.  And on that basis I think turning down the Medicaid expansion deal is just plain bad business.  The bottom line, going back to the SD Budget and Policy Project's study, is that we're walking away from 2 billion smackers because Daugaard and his allies are worried about what might occur after 2020, when SD's contribution stabilizes at about 10% of the program's cost.  I think the Governor is overly squeamish about this and isn't considering how much value to SD is rendered during the 6 year stretch ahead of us.  If the Governor believes that funding from the feds will shrink dramatically, he should make a case for refusing any of the $2 billion in federal money that South Dakota gets every year.  After all, what guarantees are in place to ensure that funding for those programs will exist after 2020?  I think we have to be reasonable people and make measured decisions on realistic expectations.                       And when it comes to expectations, the payoff to healthcare providers between now and 2020 looks to be nearly $1 billion.  That will more than compensate them for the nearly $100 million a year they don't collect from people who can't pay their bills.  That lost money is naturally recovered from people and insurance companies by way of higher costs.  I think it's reasonable to expect some relief on that front if the Medicaid expansion results--and it's probably more than reasonable to assume that the flood of federal money will have a bracing effect on South Dakota's economy, across the board.  From my Republican businessman's perspective I have no problem with that eventuality, whatsoever.
     Given that the Daugaard administration has an acute fixation on economic development, it seems odd--strange, maybe--that the governor isn't enthusiastically endorsing this opportunity.  We're talking about a $2 billion windfall, which I have no doubt will rollover a few times and create much more than that over the next several years.  I really think our elected leadership is doing a disservice to South Dakota by turning down this kind of money.


  1. Excellent article John. To me, it is like saying I can bet two million dollars and be guaranteed that I will win two hundred million but I refuse to do it because I don't believe in gambling. A couple of days ago, Eastern South Dakota activist and former State head of Bread for The World, Cathy Brechtelsbauer, commonly known as B, came up with a unique way to encourage the governor to accept the federal program.

    To keep messages going to the governor over the next few weeks, each of us could mark our calendar's "To Do list" for sending a heart-felt message to encourage him:
    If your birthday is in January, contact him today or tomorrow.
    If your birthday is in February, contact him Wednesday.
    If your birthday is in March, contact him Thursday.
    If your birthday is in April, contact him Friday.
    If your birthday is in May, contact him next weekend or Monday 3/31.
    If your birthday is in June, contact him Tuesday , April 1.
    If your birthday is in July, contact him Wednesday, April 2.
    If your birthday is in August, contact him Thursday, April 3.
    If your birthday is in Sept, contact him Friday, April 4.
    If your birthday is in Oct, contact him the next weekend or Monday April 7.
    If your birthday is in Nov, contact him Tuesday , April 8.
    If your birthday is in December, contact him Wednesday, April 9.

    If you miss your day, do it as soon as your realize you missed.

    1. Thanks, Lanny. There's no rationale that justifies denying the state the kind of money that will come into it by accepting the expansion deal. I like Cathy's plan and will send my missive to Pierre next week. Hope all who read this and agree will follow through.

  2. John,
    I agree with your article. I do want to also speak to how the Governors refusal also can cost the South Dakota Counties money.

    The Catastrophic County Poor Relief Program (CCPR) was established under South Dakota Codified Law (SDCL) 28-13A in 1984 to assist counties with the payment of catastrophic medical expenses incurred on behalf of individuals who are medically indigent and who have no ability or only limited ability to pay the costs of hospitalization.

    Under the program, the hospitals send unpaid bills to the county to pay. The county can negotiate the bill down or paid the submitted charges. This costs taxpayers money that could be used for other county needs. If the bill is negotiated down, it will ultimately cost all of us with health insurance more. Not insuring another 48,000 fellow South Dakotans will cost the counties more money. A good example of these costs is Minnehaha County, where it costs the county $1 million per year.

    Republican or Democrat this is just a bad business decision.

    Joe Lowe

    1. Thanks for adding an important consideration, Mr. Lowe. Property taxes that are directed at this program could be shifted to education if South Dakota were to accept the Medicaid expansion deal. Certainly hope you bring this up during your campaign for Governor, as it needs to be an important part of the discussion. Appreciate the comment, and best of luck with the campaign.

    2. Mr Lowe, Thanks for your enlightenment on the State law, and also how it affects the counties. You point out the saddest part of this whole refusal by State government to accept the medicaid assistance of the federal government. It is not like the 48,000 that you mention are a bunch of dead beats. They are the working poor who earn more than the poverty level established by the feds, but not enough to be able to get into health insurance. In addition because South Dakota is unwilling to participate in the federal program, there are less options available in the insurance pool, and also less ability to take advantage of the federal program. The State's refusal to participate is just plain mean spirited.

    3. Excellent post, Mr. Tsitrian, and excellent additional points, future Gov. Lowe! : )

  3. Well spoken John.

    1. Thanks, anonymous. The words are mine, but the thoughts are shared by many. I invite readers to forward this blog post to the Governor's office and their respective state legislators.