Makenzie Huber, South Dakota Searchlight
Despite Republican U.S. Congress members’ intentions to set Medicaid work requirements at a federal level, South Dakota officials plan to ask President Donald Trump to approve their own set of Medicaid work requirements.
Medicaid is government-funded health insurance for people with low incomes, and for adults and children with disabilities. South Dakotans voted in 2022 to expand Medicaid to adults with incomes below 138% of the poverty level, a decision that allowed the state to capitalize on a 90% federal funding match. In 2024, voters passed another constitutional amendment to let the state to seek approval from the federal government to impose Medicaid work requirements.
The state’s waiver proposal seeking approval for a Medicaid work requirement had been drafted by the time Congress began to debate work requirements at the federal level this year.
Individuals working, earning an income and gaining “independence and self-sufficiency” experience “greater health and economic well-being,” the proposal states.
Ben Hanson, North and South Dakota government relations director for the American Cancer Society Cancer Action Network, said barriers to accessible and affordable health care hurt South Dakotans in the long run. He worries work requirements at the state or federal level will burden employees and small business owners with paperwork. A majority of Medicaid recipients already work or are exempted from work, he said.
Given South Dakota’s tight budget outlook, he worries lawmakers won’t pay to properly staff and oversee a work requirement program. Too little staff and too much paperwork, could keepSouth Dakotans from seeking needed care, he said, which could lead to more costly expenses if a medical condition goes untreated.
“It seems like it’s set up for non-success,” Hanson said.
The state will take public comment on its proposal through June 18.
How is SD’s proposal different from the federal proposal?
At the federal level, proposed Medicaid work requirements would mandate those between 19 and 65 who rely on the state-federal health program to work, participate in community service, or attend an educational program for at least 80 hours each month.
South Dakota’s state-level work rules, as proposed, wouldn’t require employed Medicaid recipients to work or be in school for a set number of hours. The state would review compliance on an annual basis, at the time of Medicaid renewal.
The federal government also has more exceptions to its proposed changes than the state.
South Dakota would allow exceptions for people who are:
- Pregnant or postpartum,
- Disabled, as determined by the Social Security Administration,
- Have a cancer or other serious or terminal medical condition verified by a physician,
- In an intensive behavioral health treatment program, hospitalized or living in a nursing home facility,
- In an area with at least unemployment 20% higher than the national average and are exempt from SNAP requirements for able-bodied adults without dependents.
People who would meet the state’s requirements are:
- Employed
- Enrolled in job training or school
- Caretakers for a dependent child in their home
- Caretakers for an elderly or disabled person in their home
- People who already meet work requirements for other federal programs like SNAP or unemployment insurance.
The federal program would also exempt tribal community members, those in the foster care system, people who were in foster care who are younger than 26, individuals released from incarceration in the last 90 days, among others, from work requirements.
During Trump’s first administration, the Centers for Medicare and Medicaid Services approved 13 state work requirement waivers. Arkansas’ program was the first to implement its program in 2018, but that state was stopped by a federal court after nine months. About 18,000 people lost coverage in Arkansas. Employment levels did not increase.
The Biden administration rescinded all work requirement approvals, but Georgia started its own work requirement program in July 2023 without federal support.
How would work requirements impact South Dakota’s Medicaid expansion enrollment?
Per South Dakota Department of Social Services’ estimate, 80% of the people who got coverage under Medicaid expansion already work or wouldn’t have to under its proposed work requirement.
South Dakota’s Medicaid expansion population as of April 2025 stood at 30,542. Covering the expansion population will cost about $364.5 million this year.
A work requirement program would reduce enrollment by 5-10% in the first year, the department said.
That would save the Medicaid program between $48.9 million and $71 million in the first year, the department claims. In the following years, the department expects enrollment to stay flat if work requirements are implemented rather than grow at a previously anticipated 2% each year.
South Dakota voters will decide next year whether to continue requiring Medicaid expansion if federal support for the program declines. The ballot question will ask voters to authorize the termination of Medicaid expansion if federal support falls below 90%.
In addition to setting work requirements at a federal level, Republicans pushed a Medicaid overhaul through the House in a budget reconciliation package this week. The changes reduce the program by $625 million over 10 years under the latest estimate by the Congressional Budget Office.