Gov. Dennis Daugaard announced today that South Dakota will not pursue legislation to establish a health insurance exchange during the 2012 legislative session.
"There is too much uncertainty for me to recommend legislation to create an exchange at this time," the Governor said. "The President's health law could be struck down by the U.S. Supreme Court this summer, and if the Republicans win the presidency and the U.S. Senate, many parts of the law could be repealed in 2013."
"The federal government hasn't released some very important regulations either, such as the definition of minimum essential health benefits, so we don't know all the requirements we will have to meet to run an exchange," Gov. Daugaard said. "At a minimum, we must know whether this law is constitutional before we pass legislation at the state level. It doesn't make sense to pass laws that we know could be unconstitutional."
After months of hard work by a planning group composed of providers and experts from the public and private sector, South Dakota has decided to apply for federal establishment grant funding to continue planning for an exchange, in case one is legally required. If the federal law is upheld and the state chooses not to create an exchange, the federal government will set up and run an insurance exchange in South Dakota.
"I've been against President Obama's massive health reform legislation since the beginning, but if we are forced to implement this law we should try to retain as much control over our insurance industry and Medicaid system as possible, " Gov. Daugaard said.
The Governor said he is not willing to risk the harm to the South Dakota insurance industry or state citizens that could come from a federally run exchange without further research and planning.
"I hope the law is ruled unconstitutional in its entirety, but right now we don't know whether that will happen, " Gov. Daugaard said. "Reality dictates that we have to continue planning for the possibility of a health insurance exchange, and we will continue to do so using federal grant dollars."