Number of Minnesotans without health insurance grows by 18,000

Sept. 13--The number of Minnesotans without health insurance rose last year for the first time since 2013, when the Affordable Care Act took full effect, according to a U.S. Census report that was closely watched because of the continuing battle over the law's legacy.

Some 243,000 Minnesotans lacked health insurance last year, an increase of 18,000 people from 2016, the bureau said in a report released Wednesday morning.

Still, at just 4.5 percent, Minnesota has one of the lowest uninsured rates in the country. Nationwide, the uninsured rate leveled off at 8.8 percent, or 28.5 million people.

Wednesday's release took on special significance because of recent efforts by the Trump administration and Congressional Republicans to scale back the 2010 federal health insurance law, often called Obamacare. The share of uninsured people in Minnesota and nationally plummeted as the law took effect, and public officials have been waiting to see if that trend continued into 2017.

Minnesota was one of 14 states where the number of uninsured rose last year. The rate fell in three states.

This is the second study to show that health coverage is dropping in Minnesota.

A survey by the Minnesota Health Department, which used different methods, found that the uninsured rate jumped to 6.5 percent in 2017 from 4.3 percent in 2015, also the first increase since 2013.

"What is of particular concern is that the uninsurance rate increased at a time of reasonable economic prosperity," said Stefan Gildemeister, the state's health economist at the Health Department.

Minnesota is still a long way from the 2013 uninsured rate of 8.2 percent, but the 2017 uptick comes as some components of the state's insurance system show weakening.

"I think it is significant and is something we have to watch," said Lynn Blewett, a professor at the University of Minnesota School of Public Health who studies health policy and coverage data. "The concern is that the trend is going up."

One long-standing reason why so many Minnesotans have health insurance is that the state's employers are above average in providing the benefit to workers. But employer coverage has shrunk gradually over the last decade as health care costs rose relentlessly.

"If this continues to soften, it creates real worry because we don't have a safety net for people [who have] a job and good income to get affordable insurance coverage," Gildemeister said.

Another factor behind the upturn could be instability in Minnesota's individual insurance market. Although only about 5 percent of Minnesotans buy health insurance directly, the number of people buying such coverage peaked in 2015 at about 309,000 and has fallen to 162,000 as of last March.

During that time, premiums spiked for 2017, driving many people away. The Legislature stepped in with rebates for some, as well as financial support for the insurance companies, actions that have helped stabilize premiums and coverage.

"The expense of medical care and the expense of insurance premiums mean that people are making decisions all the time about whether they will be covered this month or this year," said Jim Schowalter, chief executive of the Minnesota Council of Health Plans, which represents the state's major health insurers.

Obamacare mandate

Schowalter said people still have opportunities to enroll in the state's Medical Assistance and MinnesotaCare programs for low-income residents, as well as use premium subsidies on the MNsure insurance exchange.

"State data shows that half of Minnesotans without insurance probably could get help, whether federal help in paying premiums or state public programs. So we can do better," Schowalter said.

In a major step last year, Congress neutered the federal law's mandate that everyone buy health coverage. The mandate still exists in law, but beginning next year federal tax penalties for going without coverage will end. That could cause younger and healthier people to exit the market, but it could also affect those with higher incomes.

The loss of a mandate could drive out "those people who have incomes that are just high enough to not [qualify] for public premium subsidies but still have difficulty affording coverage in the market," said Blewett.

Insurers say it's important to keep both these groups as customers; they broaden the risk pool and help stabilize insurance markets because they tend to have lower medical expenses than other, sicker Americans.

Continued softening in the number of Americans with health insurance could have secondary effects, researchers say. Studies show that the uninsured are more likely to defer care.

And when they do need expensive treatment, it can increase the costs to hospitals in the form of charity care or unpaid hospital bills.

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