"If we're left out of the benefits that can come from the Affordable Care Act, how do we take care of the people of South Dakota who are below the federal poverty level?" said Dr. Rob Allison, of Pierre, president of the South Dakota State Medical Association.
The federal law seeks to reduce the number of uninsured by requiring those who can afford coverage to obtain it. But the Supreme Court ruled that states cannot be required to expand Medicaid to cover more of those who can't afford policies.
Daugaard said he would consider expanding Medicaid after more is known about the impact and how much flexibility the state will have in administering the program.
"You can wait, evaluate your budget situation, see how your economy is going, and see how your Medicaid costs are coming into control," the governor said.
Daugaard, along with many other Republican governors, opposed the new law and had hoped it would be repealed if Obama was not re-elected. The new health law's first postelection deadline is Friday, when states must notify the federal Health and Human Services Department whether they will set up an online marketplace for residents and businesses to use in shopping among competing policies. Daugaard announced in September that South Dakota instead will let the federal government operate and pay for the online system, known as an exchange. Coverage is slated to begin in 2014.
Dave Hewett, president of the state healthcare association, said all patients will suffer if more low-income residents aren't allowed into Medicaid. He said people without coverage often delay getting medical care until they are very sick and then show up at hospital emergency rooms. Since they can't afford to pay for expensive emergency care, hospitals have to charge insured patients to offset losses in charity care, he said.
"People stay healthier when they have health insurance coverage. For people who are poor and can't get that coverage currently, this is important to them," Hewett said.
South Dakota's Medicaid program now covers about 116,000 children, adults and disabled people at a cost of $300 million a year to the state.
Most of the estimated 48,000 low-income people who aren't covered are adults without children, Daugaard said.
State officials are conducting a study on how much they would cost.
"Is it sick people? Is it mostly young people? Young adults are cheaper to cover than 60-year-olds," he said.
Daugaard said he doubts any Medicaid expansion will come by 2014, when much of the federal law goes into effect. But he said it might be possible in 2015 or 2016.
He said he hopes federal officials will allow flexibility on the income ceiling for eligibility, what ages to cover or what medical services would be included.
Under the new system, the federal government will cover the full cost of Medicaid expansions through 2016. The state's contribution would then begin to rise in stages to 10 percent.
However, Daugaard said the state would still have to pay millions in additional administrative costs. Overall, he said, the extra cost could be a "pretty sizable amount."
Hewett, representing the hospitals, said South Dakota hospitals were unable to collect $89 million for patient care in 2010, either through charity cases or bills people did not pay.