A new report underscores the percentage of South Dakota disenrolled from Medicaid coverage due to the public health emergency unwinding.

Researchers with the Urban Institute point to three policies that led to the large decrease.

States with high Medicaid disenrollment rates — like South Dakota — also saw high child disenrollment. Last year, the federal government reported a 27 percent in Medicaid enrollment for South Dakota kids.

A new report, created in conjunction with the Robert Wood Johnson Foundation, points to three state policy decisions contributing to those high rates.

“South Dakota is a good illustration of basically all of the things we highlighted in that paper,” said Matthew Buettgens, a senior fellow at the Urban Institute and one of the researchers who compared Medicaid enrollment data with projections.

Buettgens said states that took less than 12 months to disenroll Medicaid applicants had higher disenrollment.

States that prioritized and identified people likely to be ineligible also saw higher child disenrollment.

The Center for Medicaid and Medicare Services allowed states to apply for over a dozen waivers to streamline the unwinding process and reduce the number of people who are unnecessarily disenrolled. Of those fifteen waivers, the state only applied for one.

“That certainly is contributing to the high child disenrollment,” Buettgens said. “It’s not at all clear that that’s the entire story. Because the child disenrollment is so high, there very well may be something else going on.”

The rate of child disenrollment from Medicaid in South Dakota alarmed federal officials last year. US Health and Human services sent a letter to the Noem administration urging it to adopt policies to make Medicaid renewal easier.

In January, state officials attributed the drop in child Medicaid coverage to rising incomes and said they’re following federal guidance for disenrolling children.

In a statement, DSS Secretary Matt Althoff said the department followed all federal guidance during unwinding. He adds all renewals are examined based on eligibility requirements set forth in the state Medicaid plan, which was approved by the feds.

South Dakota Department of Social Services Secretary Matt Althoff full statement:

The South Dakota Department of Social Services has followed all federal guidance during unwinding. All renewals have been examined based on the eligibility requirements set forth in the state’s Medicaid plan, which has been reviewed and approved by the federal government. DSS is confident in the results from our unwinding efforts.

Regarding the UI report, South Dakota is called out in this report based on projections that the study authors alone created.  In fact, the report itself acknowledges that state-specific economic factors and employment rates can cause Medicaid enrollment to deviate from their projected trends (second paragraph under limitations, pdf page 14).   UI’s analysis is based on estimates of past enrollment trends in their Health Insurance Policy Simulation Model (HIPSM) which they used to project a future enrollment rate.  But the study author’s note that for smaller states, there is greater uncertainty in those projections.  DSS also notes the study’s acknowledgment that increased economic growth in a state reduces its Medicaid enrollment (UI report executive summary). 

DSS offers essential context in which to review Unwinding data for South Dakota:

• Medicaid and CHIP enrollment in South Dakota were steadily declining prior to the start of the public health emergency. 
• The policies mentioned in the UI report are not part of the state Medicaid Plan  
• South Dakota’s Plan for Unwinding, which was approved by CMS, projected enrollment rates to decline and trend toward pre-pandemic levels. Indeed, this is precisely what occurred. 
• The percentage of children enrolled in South Dakota Medicaid declined by 0.32% per year between 2020 and 2023, comparable to the previous two years decline of 0.30% per year. 
• South Dakota concurrently experienced declining numbers for SNAP, TANF and CCA (Child Care Assistance) over the same time period measured in the UI report. 
• South Dakota had the 4th lowest rate of procedural closures (for administrative rather than income basis) in the nation.  (KFF Health News tracker)