Governor Dennis Daugaard's proposed budget for the state next year does not include an expansion of Medicaid benefits.
Because of the Affordable Care Act, which some call Obamacare, it’s become a politically charged topic across the nation.
Obamacare and the expansion of Medicaid are hot button issues in South Dakota too.
Daugaard's decision made national headlines when he became the ninth Republican governor in the country to reject expanding Medicaid. Daugaard says he is trying to be cautious with state money during uncertain economic times.
"My recommendation is to not expand Medicaid now. It's not a now or never decision. It’s a not now decision," Daugaard said.
Daugaard recognizes the state could pay the $1 to $2 million that it would cost to expand health care coverage to thousands of South Dakotans today. He worries the financial uncertainty in Washington might leave states with a higher share of the bill down the road.
"We want to be careful that we don't get in now and take it easy for a couple of years because it would be easier in these first few years and then later on were in a fix because we can't handle it," Daugaard said.
Ben Nesselhuf, chairman of South Dakota’s Democratic Party, charges Daugaard is playing politics and thinking about re-election rather than what's best for South Dakotans.
"He's scared of the Tea Party crowd, and we've seen this happen nationally. Where you have politicians making decisions not for the good of their state, but because they are scared of a Tea Party challenge in the primary," Nesselhuf said.
"I think it’s his job to paint this as political. I don't regard this as a political decision, but he can have his opinion, if he likes. I reject it," Daugaard said.
There are 30,000 South Dakotan currently without health coverage. They live below the poverty level, don't qualify for Medicaid and they don't make enough money to pay for health insurance.
"We have a choice. We can have a transparent tax system that collects and pays for those costs or we can have health care providers trying to figure out how to cost shift those things or ship them to the county to cover those costs," SD Budget and Policy Project Director Joy Smolnisky said.
Daugaard stresses he is not exercising the state's right to opt out of Medicaid expansion. He is choosing to not participate right now until the state and federal budgets are firmed up.