South Dakota legislative committee advances proposal asking voters to repeal Medicaid expansion

Americans for Prosperity lobbyist Don Haggar testifies on a bill before the House State Affairs Committee at the South Dakota Capitol in Pierre on Jan. 28, 2026. (Photo by Joshua Haiar/South Dakota Searchlgiht)

PIERRE — South Dakota lawmakers advanced a resolution Wednesday at the Capitol that would ask voters in November to repeal the state’s obligation to provide expanded Medicaid coverage, potentially reopening a policy debate from four years ago.

The House State Affairs Committee voted 8-4 to send the bill to the full House of Representatives. If approved by the House and Senate, the measure would go to voters in the Nov. 3 election.

The proposed state constitutional amendment would repeal the Medicaid expansion requirement that voters adopted in 2022 with 56% support.

Medicaid is a low-income health insurance and disability assistance program, jointly funded by the federal government and the states. The 2022 ballot question expanded eligibility to adults with incomes up to 138% of the poverty level. Because the expansion is part of the state constitution, it can only be altered by voters.

Lawmakers will ask SD voters for permission to end Medicaid expansion if federal support declines

Rep. Aaron Aylward, R-Harrisburg, the new bill’s sponsor, said the state cannot afford the expansion. He cited budget estimates showing South Dakota’s cost for expansion enrollees would be roughly $35 million to $40 million annually over the next five years if the federal government continues to pay 90% of expansion costs. He added that the state faces a fiscal cliff if Congress reduces the federal share.

Americans for Prosperity lobbyist Don Haggar said placing a major policy directive in the state constitution was improper, adding that such decisions should be left to lawmakers who can adjust policy as budgets change.

“It’s unsustainable, and it’s a fiscal cliff, and we should at least allow the public to weigh in on this,” Haggar said. 

Opponents countered that voters settled the question in 2022 and put it in the constitution because lawmakers refused to expand eligibility. They said expansion has cost the state less than projected while covering about 30,000 South Dakotans at a cost of about $39 million annually for the state. Initial projections were 55,000 people, costing $70 million. 

AARP South Dakota’s Erik Nelson said repealing expansion would increase medical debt, delay preventive care, and increase insurance costs for all insured South Dakotans, who will be left paying for the care of uninsured people. He said the people in the expansion population are working, caregiving, in school, or dealing with chronic illness or disability. 

Nelson added that when people are uninsured, they’re likely to wait until they need to go to an emergency room, which is more costly than preventive care, and those costs will be pushed onto insured people’s premiums. 

Hospital and health care advocates — including Avera, Sanford and Monument Health — echoed the point, warning that repealing expansion would increase uncompensated care and shift costs to hospitals, who will have to pass them on to other patients and their insurance. 

Tim Rave, former speaker of the House and current president and CEO of the South Dakota Association of Healthcare Organizations, said $39 million, as part of a multi-billion-dollar state budget, is hardly the biggest issue for South Dakota’s fiscal concerns.

“It’s not Medicaid expansion that is busting the budget, just to be very clear about that,” Rave said. 

Several opponents also raised a procedural concern: A separate measure already placed on the November ballot by lawmakers would ask voters to authorize the termination of Medicaid expansion if federal support falls below 90%. Opponents of the new bill argued that adding a full-repeal question could create conflicting outcomes and invite a legal fight.