Study shows $8.8B AHCA Medicaid funding disparity for SD

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A Missouri Hospital Association report outlines the potential for significant funding disparities between states that expanded Medicaid compared to non-expansion states.

The study reviews the current version of the American Health Care Act (AHCA), focusing on the 19 states that opted out of the Affordable Care Act’s (ACA’s) full expansion for Medicaid, including South Dakota. It concludes that non-expansion states will receive $680 billion less than expansion states over 10 years, with South Dakota’s portion of that loss reaching an estimated $8.814 billion (see infographic).

“The report identifies the potential for locking in a massive funding disparity between expansion and non-expansion states,” said Scott A. Duke, president/CEO of the South Dakota Association of Healthcare Organizations (SDAHO). “While the AHCA does attempt to provide a measure of relief to non-expansion states like South Dakota, the amount is woefully insufficient and must be addressed by the U.S. Senate during their deliberations.”

The report takes into account the various structural Medicaid funding provisions contained in the House version of the AHCA over the next decade — such as the move to per capita spending caps — and other provisions meant to lessen the disparity for non-expansion states. The latter includes eliminating Medicaid Disproportionate Share Hospital (DSH) payment cuts two years earlier for non-expansion states than for expansion states, as well as establishing a $10 billion safety-net fund.

When considering these provisions, expansion states will see an average of $1,936 per beneficiary compared to $1,158 per Medicaid beneficiary in non-expansion states over the next 10 years. The disparity is a result of using 2016 as a base year when establishing the AHCA’s per capita cap rates.

SDAHO is urging Sen. John Thune (see letter) and Sen. Mike Rounds (see letter) to fight for South Dakotans and ensure Medicaid funding equity under any proposals acted upon by the Senate.