SIOUX FALLS, S.D. — The South Dakota Senate has approved legislation that would create a health benefit program, one that foes worry could undercut affordable insurance for others in the state.

The state Senate approved the health care legislation, dubbed Senate Bill 87, on a close 19-17 vote on Wednesday, Feb. 3. The bill is now before the House Agriculture and Natural Resources Committee.

Senate Majority Leader Gary Cammack, a Republican from Union Center, is the bill's main sponsor. He told the media at a Thursday, Feb. 4, briefing that tens of thousands of South Dakotans don't have health insurance and this type of plan might help save them money on health care costs.

"Health insurance costs have spiraled out of control, and in many cases it's not because they don't want it. It's because they can't afford it," he said. "This particular proposal would allow these particular individuals to save 30 to 50% on their health care plans."

"That's a proposal for a health care plan, not insurance," Cammack hastened to add, highlighting a distinction that is a key conflict point of this bill.

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The Senate approved the legislation only after amending it to make clear the health benefit plan authorized in the legislation wasn't, in fact, insurance, wouldn't be regulated by state Department of Labor's Division of Insurance, and would be backed by reinsurance coverage by a company authorized to do business in the state. The plan would be offered through the South Dakota Farm Bureau to its members.

But foes of the legislation worry the plan will still be effectively treated as insurance by those who seek it. And those signups, likely healthier, lower-risk individuals, might forgo signing up for insurance through the Obamacare-created health insurance marketplace, narrowing the state's risk pool and raising the cost of insurance premiums for everyone.

"The impact of this legislation goes beyond those who would qualify or be accepted into these plans," said David W. Benson, government relations director for the American Cancer Society Cancer Action Network in South Dakota. "It truly could have a disastrous impact and consequence on every South Dakotan because it will have a ripple effect on the market as a whole."

Benson said enrollees might also expect their plan to include coverage for necessary health care, such as access to clinical trials or a cap to maximum out-of-pocket expenses, but ultimately find them lacking since they're exempt from state insurance regulation and avoid providing patient protections required under federal law.

"Even the proponents have a challenge in terms of clearly explaining what this is, and far too often it's described as insurance when it's not," he said.

Contact Fugleberg at jfugleberg@forumcomm or follow him on Twitter: @jayfug.