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.