South Dakota Gov. Dennis Daugaard's decision to abandon plans to seek Medicaid expansion could be because Vice President-elect Mike Pence cast doubt over the future of federal matching funds through the Affordable Care Act.
On Tuesday, Daugaard, a Republican who had been supportive of expanding Medicaid eligibility in his state, said he would not recommend it to the state's Legislature this year after hearing the incoming administration's plans for repealing or reforming the ACA.
Daugaard's office had not responded to a request for comment before deadline.
Brian Blase, senior research fellow at the conservative Mercatus Center at George Mason University in Virginia said Daugaard may believe that consistent with campaign promises, Congress will repeal the federal match for expansion population.
The ACA provides 100% financing for Medicaid expansion. The rate would fall to 90% by 2020 and beyond. But the GOP swept Congress and while President-elect Donald Trump has stepped back from a full repeal of the ACA, other Republican leaders continue to talk about changes to the ACA.
“Obamacare's days are numbered, and states are wise to throw on the brakes," said Nic Horton, a senior research fellow at the conservative-leaning Foundation for Government Accountability.
More than 12 million people gained coverage as a result of lowering the eligibility for Medicaid in some 31 states and the District of Columbia, according to a report HHS released this year. Expanding Medicaid in South Dakota would have provided coverage to over 50,000 additional residents in the state.
Others agreed with Horton. “Given the current uncertainty, Medicaid expansion could be premature or a waste of time for a state,” said Dean Clancy, a tea party-aligned former White House and congressional aide, and current partner at Adams Auld, a consulting firm.
“The real question right now is not whether Medicaid will be reformed, but how dramatically.”
President-elect Donald Trump has promised to transform Medicaid to a block grant system in which a state could in theory cover anyone it wants. The catch is the funds are finite, said Chris Holt, health policy press secretary at the American Action Forum, a center-right policy institute.
Holt cautioned residents in expansion states against worrying about lost coverage. "Republicans are very sensitive to the accusations of taking healthcare away from people.” Republican lawmakers in states that have expanded Medicaid will likely want to see their constituents coverage be replaced.
Yevgeniy Feyman, a Republican analyst and senior research assistant at Harvard T.H. Chan School of Public Health says that's key to justifying repeal.
For states that have yet to expand, but were thinking about it like South Dakota, it makes sense to wait until they see how Medicaid may be transformed by the new administration.