1,213 South Dakotans could lose Medicaid as federal work requirements take effect, department says

The South Dakota Department of Social Services estimates 1,213 people on expanded Medicaid, about 4% of the group, could be disenrolled after federal work requirements are implemented in 2027.

Medicaid is government-funded health insurance for people with low incomes. South Dakotans voted in 2022 to expand Medicaid to adults with incomes up to 138% of the poverty level, a decision that allowed the state to capitalize on a 90% federal funding match.

Congress passed a law, signed by President Donald Trump, last summer to implement federal work requirements for expanded Medicaid. 

The federal work requirements will mandate that enrollees from ages 19 to 64 work, volunteer or go to school 80 hours a month. Participants will have to meet those requirements a month before they enroll, and Medicaid renewal will be moved from an annual basis to every six months.

The federal government allows exceptions for people who are disabled, pregnant, eligible for the Indian Health Service, in foster care, were formerly in foster care and are younger than 26, or were released from incarceration in the last 90 days, among others.

Home

Division Chief of Children and Family Services Tiffany Wolfgang shared the assessment and estimate with the Board of Social Services at its Tuesday meeting in Pierre.

Of the 29,504 patients enrolled in expanded Medicaid at the end of 2025, the department identified 6,066 patients, or about 20%, who “could not be determined” as meeting exemptions, work requirements or community engagement requirements outlined by the federal law.

“We do not yet collect information on volunteer service, medical frailty or veteran disability status, as these are not current factors of eligibility,” Wolfgang said in an emailed statement.

The assessment found that 39% of participants are already enrolled and compliant with other federal programs with work requirements and another 29% already meet federal work requirements. About 37% meet tribal membership exemptions and 29% meet caretaker exemptions. Recipients could be counted in multiple categories.

Of the remaining 6,066 people, Wolfgang estimates 20% will not meet the requirements by implementation, resulting in possible disenrollment. That estimate is based on what other states experienced after implementing state-level work requirements, she told South Dakota Searchlight. Previous estimates from health policy organization KFF projected 13,000 disenrollments when the One Big Beautiful Bill Act passed the House of Representatives.

Wolfgang told board members the department is working on communicating the change with tribal representatives, the department’s Medicaid advisory council, and medical providers to ensure recipients aren’t surprised by the change.

Department Secretary Matt Althoff told members of the board that the estimated number of potential disenrollments is “if we do nothing.”

“We don’t intend to do nothing,” Althoff said. “We want to make sure they understand and ultimately help put them in a position to make informed decisions that you can choose not to do the community engagement, but you won’t be eligible for Medicaid.”

The disenrollment would occur over the course of 2027, as recipients are up for Medicaid renewal.