Job-Based Health Coverage Falls Significantly in Minnesota, New Census Bureau Data Shows

Poverty Rises Dramatically in 2009 as Recession Deepened

St. Paul, Minn., Sept. 16, 2010 – U.S. Census data released today shows that the number of Minnesotans without health insurance grew significantly over the last decade. Roughly one in ten Minnesotans lacked health coverage in 2008-09. Since the beginning of the decade, the number of Minnesotans without health insurance increased by 100,000.

Behind these numbers is a larger shift in how people are getting insurance coverage. Employer-sponsored health insurance has been steadily eroding. In 2008-09, 69 percent of Minnesotans had employer-provided coverage, down from 77 percent in 1999-00. That decline translates into 300,000 Minnesotans losing their employer-provided insurance.

While employer-sponsored coverage dropped, government health care programs were filling in the gap. The number of Minnesotans accessing health care through Medicaid, known as Medical Assistance in our state, rose by more than 300,000 since the beginning of the decade; that includes 137,000 children. The increase in public health insurance, however, has not been enough to overcome both the loss of employer-sponsored health care and population growth.

“While employers have been rushing out of the market, many families, particularly children, have still been able to get the health care they need through state and federal health care options,” said Christina Wessel, deputy director of the Minnesota Budget Project.

The new Census data also shows that U.S. poverty levels jumped by nearly two percentage points in 2009. That means 43.6 million people were living in poverty in 2009. Preliminary numbers for Minnesota show the state’s poverty rate rose to 10.5 percent in 2008-09, a four percentage point increase in poverty since the beginning of the decade. Median household income in the state fell by eight percent from 2006-07, which was more than the national average. More precise state-level estimates of poverty will be released by the Census on September 28.

Federal and State Action Helped Soften the Impact of the Recession

The rise in the number of uninsured and the number of people living in poverty reveals the extent to which families are facing multiple challenges in this economic downturn. The situation, however, could have been worse.

“The Recovery Act kept millions of Americans out of poverty and ensured states maintained a basic level of access to health insurance. Without federal intervention, the number of families living in poverty and the loss of health insurance would have been even more dismal,” said Wessel. Extending unemployment benefits, increasing food and work supports, and providing states with additional health care funding helped to cushion the impact of the recession for many Minnesota families.

“Our economy may not be out of the woods yet,” said Wessel. “But we’ve already seen that government action is essential to help struggling families weather these tough times.”

The new federal health care reform law will help counteract the steep decline in employer-sponsored health insurance. Nationally, the number of people covered by employer-based health insurance is at the lowest level since tracking began in 1987. The new law will allow people easier access to health insurance outside of employment, increasing affordability by providing many families with tax credits.

“If federal health care reform were already in effect, the recession-related increase in the number of uninsured would have been a fraction of what we saw today,” said Wessel. “Under the new health care law, losing your job will no longer mean losing access to health insurance. And simplifying and expanding Medicaid will enable many Minnesotans to get coverage who can’t afford to pay for it. It’s now up to state leaders to act quickly and implement it effectively.”

Additional Information

For more information, see the Census Bureau’s: Income, Poverty, and Health Insurance Coverage in the United States: 2009.

For information on trends examining the economic well-being of Minnesotans, visit Minnesota Data Trends.

The new data comes from the Current Population Survey. Because of a relatively small sample size, the data is preliminary with regard to state poverty levels. On September 28, the Census will release estimates of state and local poverty as well as additional health insurance data from the American Community Survey, which has a larger survey pool.

The Minnesota Budget Project, an initiative of the Minnesota Council of Nonprofits, provides independent research, analysis and advocacy on budget and tax issues, emphasizing their impact on low- and moderate-income Minnesotans. The Minnesota Council of Nonprofits (MCN) is the statewide association of 1,950 nonprofit organizations. Through its website, resource publications, workshops and events, cost-saving programs and advocacy, MCN continually works to inform, promote, connect and strengthen individual nonprofits and the nonprofit sector.
 

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