The bill introduced by Lt. Gov. Tony Venhuizen in South Dakota seeks to tie Medicaid expansion to federal funding levels, specifically ensuring that if the federal government reduces its funding share below 90%, Medicaid expansion in the state would be discontinued.
This bill, which has already passed the state House and made it out of a Senate committee with overwhelming support, would send a state constitutional amendment to voters in 2026.
If approved, it could result in the end of Medicaid expansion if the federal contribution drops.
Venhuizen’s concern stems from talks with South Dakota’s congressional delegation and potential cuts to the federal match rate, especially under a Republican-controlled Congress and the Trump administration.
In 2022, South Dakota voters approved Medicaid expansion to cover more low-income individuals under the Affordable Care Act, leveraging the 90% federal funding for expansion.
However, Venhuizen argues that if that federal funding were reduced, South Dakota could face an additional $36 million in costs, posing significant budget challenges.
While some lawmakers and health advocates oppose the bill, arguing it introduces unnecessary uncertainty for thousands of South Dakotans who rely on Medicaid, the bill’s supporters emphasize the need to ensure the state’s fiscal responsibility in light of potential changes in federal policy.