South Dakota’s 2026 legislative session brought both challenges and important wins for health care. Despite a surge in proposals that could have negatively impacted providers, strong advocacy efforts helped protect the stability of our health care system—and even secure key funding improvements.
2026 Legislative Session Recap
The 101st Legislative Session concluded March 30. Early budget projections led to a proposed 0% provider increase from Governor Larry Rhoden, but improved state revenue allowed lawmakers to approve a 1.4% Medicaid provider increase—a meaningful win.
Additional Funding Highlights:
An additional 2.8 million dollars was appropriated to hold critical access hospitals harmless as Medicaid transitions to a new hospital methodology for the first time in nearly 30 years. The methodology changes will have an administrative rule hearing on June 9, with public comment open prior.
Additional health care funding included 402 million dollars for the first two years of the Rural Health Transformation Project, 9 million dollars in ongoing opioid funding (7.8 million have already been awarded), and over 1.3 million dollars to providers completing the Recruitment Assistance Programs.
It was also a successful year on the policy side of things for SDAHO, but not without a large effort by the SDAHO Advocacy Team and many partners. There were 18 bills this year that SDAHO opposed, the most our team can remember for a single year. Many of the bills would have been detrimental to South Dakota health care, but fortunately we were able to defeat every bill. Repealing Medicaid Expansion, covid-19 blood, mRNA vaccinations, standing orders for ivermectin, and repealing property tax exemptions for health care facilities are a few examples of bills that were brought forward this year. We believe things will get back to normal when we get to a more normal legislative body, hopefully in the coming years. Some positive bills that passed made changes such as limiting claims denial recoupment to 18 months, improving medication access in rural areas, and helping to broaden some ambulance liability protections and operators. Members can find more information on bills that passed with a health care impact on our 2026 SDAHO Legislative Impact Brief.
Looking Ahead: Interim & Elections
During the interim, EMS challenges in rural South Dakota will remain a key focus. Looking further ahead, the June primary and November general election—especially the gubernatorial race—will play a major role in shaping the future legislative landscape. Our hope is that a greater voter turnout will lead to more informed and health care friendly legislators being elected in the South Dakota legislature, which in turn would lead to less attacks on health care in the coming legislative sessions.
Federal Update
At the federal level, the SDAHO Advocacy Team will continue to support our members throughout the year and during upcoming hills visits on April 21st. Topics we continue to discuss with our congressional leaders include protecting:
- Protecting the 340B program
- Opposing payment cuts and site-neutral policies
- Reducing workforce barriers, including immigration challenges
- Extending critical health care waivers
We will also be focusing on the Rural Health Transformation Project and how that is being rolled out in South Dakota so that our leaders know our experiences.
In closing, the SDAHO Advocacy Team wants to thank all of you for the help that you provide throughout the year, especially during the legislative session when we send out action alerts. If you have any feedback for the SDAHO Advocacy Team or have questions or suggestions on things we can incorporate in our efforts, please contact Jacob Parsons, Director of Advocacy and Reimbursement.
