Minnesota's uninsured rate drops 40 percent under Affordable Care Act

St. PAUL - The first comprehensive look at how the federal Affordable Care Act has changed health insurance in Minnesota shows a 40 percent decline in the number of people lacking coverage between September and May.

Released Wednesday, the study from University of Minnesota researchers estimates that 180,500 uninsured people found coverage during the time period, dropping the state’s uninsured rate from 8.2 percent to 4.9 percent.

In some ways, the coverage expansion is not surprising, because it came at a time when the federal health law created incentives and penalties designed to connect more people with health insurance.

But researchers said they were impressed by the magnitude of change.

Critics of the state’s MNsure health insurance exchange have repeatedly questioned whether the law is having its expected impact on the uninsured rate in Minnesota, where a balky MNsure website and overwhelmed call center made it difficult for many to get coverage.

In January 2013, state officials projected that by 2016 the number of Minnesotans lacking coverage would be cut by between 298,000 and 340,000. So, the figures released Wednesday suggest the state is more than halfway to the goal.

“What this shows is that we’re squarely on track,” said Scott Leitz, chief executive officer of MNsure.

“We saw for decades the uninsured rate hover between 7 percent and 9 percent. And it’s now below 5 percent. This is the first time we’ve ever made a huge dent in the uninsured number.”

Democratic Gov. Mark Dayton, who pushed for the creation of MNsure, cheered the study’s findings.

“Today’s report demonstrates that health reform in Minnesota is headed in the right direction,” Dayton said in a statement.

House Speaker Paul Thissen, DFL-Minneapolis, said in a statement: “In their partisan attacks on MNsure and the Affordable Care Act, Republicans asked time and time again if the uninsured rate is going down. Today we have a clear answer that yes, MNsure is making a huge difference.”

But Republicans said the report doesn’t specify whether the decline can be attributed to MNsure or other factors.

To the extent the reduction came from people enrolling in the state’s Medical Assistance and MinnesotaCare insurance programs, the state “didn’t need MNsure at all,” said state Sen. Michelle Benson, R-Ham Lake.

Noting that the state has won more than $150 million in federal grants to launch MNsure, Benson asked: “Is it worth it?”

Starting this year, the Affordable Care Act will require almost all Americans to have health insurance or pay a tax penalty.

The law also expands eligibility in many state Medicaid programs and offers tax credits for many to buy coverage from private insurance companies.

The Minnesota analysis fits with several recent national surveys that also have shown declines in the uninsured rate, said Julie Sonier, deputy director of the U’s State Health Access Data Assistance Center, which published the report.

The report couldn’t say exactly where the uninsured found coverage, that is, whether insurance was obtained through public programs, private insurers available through MNsure or commercial plans sold outside the health exchange.

As of May 11, more than 214,000 had enrolled in public and private health insurance through MNsure, which was available to people who already had coverage.

Of the 40 percent decline in the state’s uninsured rate, Sonier said: “I don’t know that we really were in a position to have solid expectations about what the number would be, but I would say, yes, we were surprised by it.

“In the past two decades of looking at uninsured rates, we have never seen a decline of this magnitude,” she said.

The study tracked changes in the sources of coverage for state residents, drawing on enrollment data from state programs and Minnesota-based private insurers. Researchers also made projections for coverage provided by non-Minnesota insurance companies and those covered through certain large group health plans.

The study found a 20.6 percent increase in people enrolled in the state’s Medical Assistance and MinnesotaCare programs, where insurance is either free or heavily subsidized.

There also was 12.5 percent growth in those who buy commercial insurance policies for themselves without help from an employer.

Overall, private insurance coverage grew by just 0.9 percent, since the study found a slight decline in group coverage.

Going forward, researchers plan to analyze how many who bought through MNsure were previously uninsured. Future surveys will provide information about the characteristics of those who gained and lost coverage, as well as those who still lack insurance.

“We’re really going to have to take the effort up a notch to get the remaining uninsured,” said Julie Brunner of the Minnesota Council of Health Plans, a trade group for insurers.

Growth in coverage through the state’s public health insurance programs shouldn’t be surprising, because previous reports showed that about two-thirds of uninsured Minnesotans qualified for - but didn’t take advantage of - public coverage, said Scott Keefer, vice president for policy and legislative affairs at Blue Cross and Blue Shield of Minnesota.

“Maybe the best thing that the (federal health law) did for those individuals is increase the level of awareness that they were eligible,” Keefer said.

The slight decline in group coverage during the period is troubling, particularly if it’s concentrated among small employers, said Peter Nelson, public policy director at the Center of the American Experiment, a Golden Valley-based group that promotes free-market reforms. The growth in coverage by government programs shows “the Affordable Care Act is doing what many of us feared it would do,” Nelson said.

Earlier this year, the state estimated there were 445,000 people without coverage in Minnesota during 2013. So, the report released Wednesday suggests the number of uninsured fell to about 264,500 by May 1.