"The citizens of South Dakota are going to continue to get care, but it's going to be more expensive and it's not going to have the same kind of outcomes," Heinemann told the Rapid City Journal.
Under the federal health care law, states have the option of expanding Medicaid, the state-federal program that covers health care for low-income people. If South Dakota expands Medicaid eligibility, an estimated 48,000 additional people would be covered.
The federal government would cover about 100 percent of the cost of the additional patients until 2016. From 2020 onwards, the federal government would cover 90 percent of the cost, with the state paying the other 10 percent.
Daugaard has not yet decided whether to expand Medicaid. He has said he is worried that the federal government will not live up to its promise to fund the expansion in the long term, which could force the state to pay more than 10 percent.
Heinemann said the governor's argument is flawed because all South Dakotans would pay more if the state chooses not to expand Medicaid and hospitals shift the cost of unpaid bills by charging more to people with insurance.
An expansion of Medicaid would provide preventive care to more low-income patients, reducing emergency room visits, Heinemann said. That could reduce the growth of private insurance premiums, he said.
In addition, South Dakota has a moral obligation to help its most vulnerable people, Heinemann said.
"We know that people who are uninsured are more likely to live longer and have healthier lives," he said.