Minnesota's coverage dynamics shifted prior to pandemic
March 01, 2021:
In the three years prior to the COVID-19 pandemic, Minnesota’s health insurance landscape shifted in multiple ways. One positive development was a significant increase in rates of employer-sponsored insurance (ESI) from 2016 to 2019. Others were potentially troubling—such as the significant decline in rates of health coverage through the individual market.
The performance of the state’s uninsurance rate demonstrated the clearest reason for concern. In the first few years of the Affordable Care Act’s coverage expansions, Minnesota’s uninsured rate declined to a historic low of 4.2 percent in 2016. Since then, however, the state’s uninsurance rate has increased significantly, reaching 4.8 percent by 2019.
A changing coverage landscape prior to the pandemic
The health insurance gains in the early years of the ACA coincided with a statistically significant increase in Medicaid and CHIP coverage, which grew from 11.0 percent in 2013 to 13.8 percent in 2016. Meanwhile, other coverage through the individual market (7.4 percent in 2016) and employer-sponsored insurance (58.5 percent in 2016) remained statistically unchanged in Minnesota as compared to 2013 rates (Figure 1).
Figure 1. Minnesota health insurance rates by coverage type, 2013-2019 (Total population)
After 2016, however, those patterns changed in ways that may have posed challenges in the lead-up to the pandemic in 2020. For instance, at the same time that the Minnesota uninsurance rate increased, coverage through the individual market dropped significantly, from 7.4 percent in 2016 to 5.3 percent in 2019.
Conversely, a statistically significant increase in employer-sponsored insurance—from 58.5 percent in 2016 to 59.8 percent in 2019—initially appears encouraging. However, employer-based coverage tends to be cyclical, increasing as the economy improves and employment increases and declining when economic conditions deteriorate and unemployment increases. For that reason, it is likely those gains in employer-sponsored insurance were eroded as the coronavirus crisis caused massive job losses beginning in 2020.1
Growth in ESI could pose vulnerability for nonelderly adults leading into 2020 crisis
Trends in health insurance coverage for nonelderly adults (age 19 and older) are similar to the overall population during this time, though more exaggerated. The uninsurance rate for nonelderly adults was even higher than the overall population in 2019, and it represents a larger, statistically significant increase since 2016 (from 5.7 percent to 6.6 percent in 2019) (Figure 2).
Figure 2. Minnesota health insurance rates by coverage type, 2013-2019 (Nonelderly adult population)
That increase in uninsurance occurred alongside significant declines in Medicaid coverage, from 12.3 percent in 2016 to 11.3 percent in 2019, and individual-market coverage, from 9.4 percent in 2016 to 6.9 percent in 2019. Meanwhile, employer-sponsored insurance for nonelderly adults increased significantly, from 69.7 percent in 2016 to 72.5 percent in 2019. Though, as noted earlier, those improvements were likely undermined or eliminated by pandemic-related job losses.
Stability in public coverage may serve as a buffer for kids
The coverage dynamics of the past few years may provide more insulation against loss of health insurance for children leading into the pandemic. Unlike for nonelderly adults, the uninsurance rate for Minnesota kids did not change significantly from 2016, remaining effectively steady at 3.4 percent in 2019.
Figure 3. Minnesota health insurance rates by coverage type, 2013-2019 (Child population)
Additionally, kids did not see the same statistically significant increase in employer-sponsored insurance that nonelderly adults experienced. Their 2019 rate of ESI was 66.2 percent, which was not significantly different from 2013 (65.0 percent). While that lack of increase may have been disappointing at the time, it also means that children’s ESI rates don’t have as far to fall due to fallout from the COVID pandemic. Meanwhile, the rate of Medicaid and CHIP coverage for Minnesota kids remained statistically unchanged since 2016, at 26.0 percent in 2019. Children did, however, see a significant decline in individual market insurance, from 6.4 percent in 2016 to 4.4 percent in 2019.
During the first few years of the ACA, Minnesota uninsurance rates declined significantly. That coincided with significant increases in Medicaid (and CHIP) coverage as the state adopted the ACA’s Medicaid expansion. But more recently, that reduction in uninsurance has been partially reversed—posing a serious challenge going into the public health and economic crises of 2020 that are believed to have caused health insurance losses for potentially millions of people.
In the coming months of 2021, it will be important to monitor coverage patterns and work to ensure that those who have lost insurance due to the coronavirus are aware of their options to regain coverage. ACA policies that were designed to increase access to health coverage—such as Medicaid expansion and tax credits to make individual market coverage more affordable—could help to soften the blow of ESI lost due to the pandemic recession.
Some early research using the Minnesota Health Access Survey (MNHA) and Health Insurance Enrollment Survey found evidence that Minnesota’s uninsured rate has remained relatively steady through the first half of 2020, at roughly 4.6 percent.2 The survey found that while ESI declined during that time, coverage through public programs like Medicaid and Minnesota Care (the state’s Basic Health Program) increased in early 2020. However, the extent to which those patterns persisted in later 2020 and into 2021 is not yet known.
1 Golberstein, E., Abraham, J.M., Blewett, L.A., Fried, B., Hest, R., & Lukanen, E. (2020). Estimates of the Impact of COVID-19 on Disruptions and Potential Loss of Employer-sponsored Health Insurance (ESI). State Health Access Data Assistance Center (SHADAC). https://www.shadac.org/sites/default/files/publications/UMN%20COVID-19%20ESI%20loss%20Brief_April%202020.pdf