Minnesota has plenty of jobs, but health insurance? No

Dec. 17--Nine years into a robust economic expansion, with Minnesota's unemployment rate at historic lows, the number of people on public health insurance for the poor is still at historic highs.

Back in 2013, when Minnesota's unemployment rate was 5 percent, the state had 740,000 people on Medical Assistance, also known as Medicaid. Since then, unemployment has fallen to 2.8 percent, while Medicaid rolls have grown every year, reaching 1.1 million.

The result is that, despite the strongest economy in a generation, roughly 1 in 5 Minnesotans qualify for subsidized health coverage.

That economic puzzle was compounded this month when the state released its latest budget forecast. It predicts that Medicaid growth will decelerate starting in 2019, the first sign of a slowdown since the Great Recession, but says total enrollment will not shrink in the next five years.

One reason for the program's growth is that Minnesota deliberately expanded Medicaid under the federal Affordable Care Act of 2010, expanding eligibility to single adults and to higher income levels.

But a second explanation is that, despite the sinking jobless rate, it is still a stubborn economy with respect to wage growth and employer health benefits, leaving many workers eligible for state health insurance.

"If history is any guide, we certainly should be seeing more rapid wage growth than we have been," said Steve Hine, a labor economist at the Minnesota Department of Employment and Economic Development. "There is still this segment of our population that is not necessarily benefiting by the strong employment situation."

Some of the fastest growing sectors of the Minnesota economy are hospitality and retail, which traditionally offer lower wage part-time jobs that do not offer health insurance benefits.

Cierra Brown, 19, has worked at Sam's Club for five months and recently got promoted to a full-time position that she hopes will make her eligible for the company health plan. She's worked for other retailers, including Target and Cub Foods, that did not offer her benefits. For two years she has been enrolled in MinnesotaCare, a companion program to Medicaid that has slightly higher income limits.

Single adults like Brown must make less than $24,280 to qualify.

"We make people feel ashamed that they are on some kind of assistance," she said. "But they are not paying enough on these jobs for people to afford private insurance. I don't feel ashamed, because I know it helps me."

Even though many uninsured Americans are young and healthy, research has shown that having coverage increases the chance that people will get regular medical care and preventive services.

"Health insurance is so important because there are so many [people] that go untreated," said Brown, who relies on the insurance for medications and mental health therapy visits.

The percentage of Minnesota employers that offer any health benefit has fallen significantly since 2001, when 68 percent of all jobs came with access to a health plan. That was one reason the state had one of the lowest uninsured rates in the country.

But in 2017, according to a Minnesota Department of Health survey, just 53 percent of employers offered health coverage. Although the uninsured rate is still low, it ticked up last year to 6.3 percent from 4.3 percent in 2015.

Nationwide, 60 percent of Medicaid beneficiaries who are not elderly or disabled are employed -- and 42 percent work full-time, according to the Kaiser Family Foundation. Up to 80 percent of Medicaid enrollees live in a family where at least one family member works.

Even in a strong economy, Medicaid remains an option for many in the workforce. One New York City-based company, BeneStream, actually helps employers identify workers who would be eligible for public health insurance and helps sign them up. "All of our employers offer health insurance," said Ben Geyerhahn, company founder and chief executive. "What we are doing is creating another opportunity for the individual" who can't afford to pay premiums or deductibles.

The company serves some multistate employers, such as nursing homes, as well as those who work in the gig economy, such as Uber drivers. Four of its national clients have operations in Minnesota.

The trend is not lost on public officials in Minnesota, where Medicaid will account for $11 billion in the current biennial budget.

"Do I think large employers should provide access to quality health care and benefits to their employees? Absolutely," said Emily Piper, Minnesota's commissioner of human services. "Does it always happen? No. Should it happen more? Yes."

One industry pulling back on coverage is health care.

Employees "are working full-time hours, but they are not eligible for benefits," said Jamie Gulley, president of the SEIU Healthcare Minnesota union. Increasingly, he said, workers in jobs that do not require a professional degree are being hired into positions that officially are listed as having 16-hour workweeks without benefits. But employees are typically scheduled to work 40 hours a week.

"We are working to have their official positions upgraded to be benefit eligible," but it has been an uphill battle, Gulley said.

One of the fastest-growing jobs is in home health care, but those positions typically pay about $12 an hour.

"You could be a home care worker and work full time for a year and still be under $24,000" in salary, he said. Most of Minnesota's home care workers are on Medicaid or MinnesotaCare, he added.

To be eligible for Medicaid, single adults must earn less than $16,146, but the limits increase for families. A family of four would be eligible if members' combined income is less than $33,383.

At higher income levels, children in families can qualify for Medicaid even if their parents can't. A family of four making less than $69,000 can enroll their children for health coverage that comes without premiums, co-payments or deductibles. Infants and children comprise nearly half of Medicaid enrollment, or about 515,000 in 2018, a 15 percent increase since 2014.

Minnesota's strong economy has immediate effects on some public assistance programs. Enrollment in Minnesota's cash welfare assistance program, for example, has fallen nearly 9 percent, and the number of people receiving food stamps is down about 6 percent over the past year.

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