VIEWPOINT | Why privatize $122 million in public money?

Guest column by Jason Pieper

Teachers, law enforcement officers and first responders who suffer injuries on duty are experiencing unjust treatment in their workers' compensation claims, thanks to a deeply entrenched, bureaucratic, and corrupt system operating within the shadows of South Dakota's government known as pool arrangements.

Bureaucrats affiliated with private 501(c)(3) nonprofit organizations, such as the South Dakota Municipal League and the Associated School Boards of South Dakota, engage in self-dealing by marketing non-regulated insurance products exclusively to school districts and local governments. This involvement extends to direct participation in the financial outcomes of individual claims, raising concerns about conflicts of interest and ethical considerations.

Whereas South Dakota has a tried-and-true system in place for the hundreds of private insurance companies who operate in South Dakota, the big government pool arrangements do not report to state officials and operate without transparency and state oversight.

The "hear no evil, see no evil" approach adopted by select state officials has allowed pool arrangements to amass over $122 million in profits by overcharging premiums and underpaying claims. Unlike 10 neighboring states that require oversight of pool arrangements by their commissioner of insurance, South Dakota stands as an exception. Notably, there is no mechanism for consumers to file complaints against a pool arrangement. This contrasts sharply with the private sector's fair market, where the state's Division of Insurance provides a specific process for consumers to file complaints and seek resolution for their grievances.