The passage of the 2010 Patient Protection and Affordable Care Act has necessitated a re-evaluation of existing health insurance regulations by the individual states. Major changes wrought by the law already extend to the handling of pre-existing conditions, which can no longer serve as the basis to deny children health insurance coverage. Additionally, children are now allowed to be carried on their parents’ insurance up to age 26 regardless of either educational or marital status. Adults with pre-existing conditions may currently access coverage through high risk pools, a temporary system that will be replaced on January 1, 2014 when the health insurance exchanges mandated by the Affordable Care Act become fully operational.
General Insurance Regulations
Currently insurers in South Dakota may exclude coverage for a pre-existing condition for up to 12 months, or, in some cases, a permanent rider may be attached to the policy. If, however, there is no gap in the applicant’s health coverage, the exclusion may be avoided.
Health status may be used as a basis for coverage denial and for rate increases, but insurers are required to extend family coverage to those who qualify for individual coverage. Additionally, babies and adopted children must be covered for a minimum of 31 days.
Health Insurance Exchange
There has been no significant activity in South Dakota toward the establishment of a health-care exchange, and no related bills were introduced in the legislature during 2011. The governor has indicated that such legislation will also not be pursued in 2012.
Pre-Existing Condition Insurance
The South Dakota Bureau of Personnel runs the state’s Pre-Existing Condition Insurance Plan, which provides both primary and specialty care benefits as well as hospitalization and prescription medication coverage to qualified applicants. Premiums range from $156 to $718 a month with a $2000 deductible. The annual out-of-pocket limit for medical expenses is $4,250 and $1,500 for pharmaceuticals.
Qualification for Medicaid and Children’s CHIP-funded Medicaid Expansions is calculated on income as a percentage of the Federal Poverty Level. In South Dakota, children age 5 and under are eligible for Medicaid at 133% FPL and for CHIP funds at 140%. For ages 6-19, the percentages are 100 and 140 respectively.
Pregnant women may draw Medicaid benefits at 133% FPL, parents at 64%, and non-elderly Social Security recipients at 74%.
About 16% of the population of South Dakota draws Medicare benefits, with more than 132,000 accessing prescription drug coverage. More than $5,600 is spent each year in South Dakota per Medicare recipient.
Additional assistance in meeting prescription drug costs is available to Medicare recipients in South Dakota through the SD MEDX program, and the Senior Health Information and Insurance Education program (SHINE), offers counseling services and educational seminars.