Medicaid Expansion and Federal Work Requirements in South Dakota

The South Dakota Department of Social Services anticipates that roughly 4% of those enrolled under the expanded Medicaid program could face disenrollment following the introduction of federal work requirements in 2027. This change, affecting an estimated 1,213 enrollees, stems from a 2022 voter-approved Medicaid expansion that extended coverage to low-income adults earning up to 138% of the federal poverty level, bolstered by a 90% federal funding match.

Last year's federal legislation dictates that adults aged 19 to 64 within the expanded Medicaid program meet work, volunteering, or educational requirements summing up to 80 hours monthly. These prerequisites must be satisfied before enrollment, and Medicaid renewals will shift to a semi-annual basis instead of annually. Exemptions exist for specific groups, including individuals with disabilities, pregnant individuals, foster care participants, and those recently released from incarceration.

During a meeting in Pierre, Tiffany Wolfgang, Division Chief of Children and Family Services, conveyed findings to the Board of Social Services concerning the potential repercussions of these work requirements. As of late 2025, South Dakota accounted for 29,504 enrollees in the expanded Medicaid program. Among them, 6,066 individuals, or approximately 20%, remain undecided under current exemptions or the federal mandates set to come into effect.

Wolfgang highlighted that 39% of participants satisfy the work conditions through other federal programs, while 29% independently meet these criteria. Exceptions are valid for 37% due to tribal membership and 29% as caretakers; individuals may fall into multiple categories.

The department forecasts that approximately 20% of the 6,066 ambiguous cases might not comply with the future work requirements, potentially resulting in coverage loss. This estimate aligns with experiences from several other states implementing similar mandates. The department actively engages with community stakeholders, such as tribal leaders, the Medicaid advisory council, and healthcare providers, to communicate these upcoming changes and assist enrollees in understanding their options.

Matt Althoff, Secretary of the Department, stressed the importance of proactive engagement to prevent potential coverage loss. He stated, “We don’t intend to do nothing. We want to make sure they understand and ultimately help put them in a position to make informed decisions.”

Disenrollments are projected to occur throughout 2027 as enrollees arrive at their respective Medicaid renewal dates.