New Census data underlines the need for federal health care reform

The U.S. Census released new data on Thursday morning that looks at poverty, income and insurance coverage in the United States. And while most of the headlines will likely focus on the significant jump in poverty - a two percentage point increase nationally since 2008 and a four percentage point increase in Minnesota since the beginning of the decade - we want to highlight what's happening with health insurance (see our press release).

The number of Minnesotans without health insurance grew signficantly over the last decade, according to the new Census data. 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-sponsored coverage, down from 77 percent in 1999-00. That decline translates into 300,000 Minnesotans losing their employer-sponsored 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.

What does this tell us? 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.

And without federal intervention during this recession, the number of families living in poverty and the loss of health insurance would have been even more dismal. The Recovery Act, passed in 2009, kept millions of Americans out of poverty and ensured states maintained a basic level of access to health insurance.

Two emerging trends - employers dropping health care benefits and masses of individuals losing access to coverage during levels of high unemployment - underscore the importance of federal health care reform in reversing the rise in the number of uninsured. We need a system that is there for people whatever their employment status is. Under the new health care law, losing your job will no longer mean losing your health insurance. It will also make it more simple and affordable to access health insurance.

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. Acting to expand Medicaid would be a first step we could take right now to get coverage for Minnesotans who don't have any other way of accessing it.

It's now up to state leaders to act quickly and implement health care reform effectively.

A few other thoughts about the new Census data:

• The new Census data also show 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. Inflation-adjusted 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.
• Robert Greenstein, executive director of the Center on Budget and Poverty Priorities, points out that the new poverty figures somewhat overstate the increase in poverty because they do not count the bulk of the direct assistance the 2009 American Recovery and Reinvestment Act provided to households.
• Remember, if you are looking for longer-term trends on Minnesota income, health insurance coverage and other factors of family well-being, see Minnesota Data Trends. It shows that the financial challenges facing families is not just a recession-related blip, but part of a larger, systemic problem.