America’s middle class increasingly is being squeezed by rising costs of health insurance, decreasing availability of employer-sponsored insurance and declining income, according to a new state-by-state analysis by a University of Minnesota public-health center.

And some changes for Minnesota’s middle class seem more pronounced than the nation as a whole even though the state typically leads the nation in low uninsured rates, its percentage of employer-sponsored coverage and higher median income.   

The analysis was prepared for the Robert Wood Johnson Foundation’s eighth-annual “Covered the Uninsured Week” (March 14-20), which happens to coincide with a possible health-care reform vote this week in Congress.

Between 2000 and 2008, the total cost of family premiums increased 68 percent in Minnesota compared with the national average of 54 percent, according to the report, “Barely Hanging On: Middle-Class and Uninsured.”

The U’s State Health Access Data Assistance Center (SHADAC) analyzed data from the U.S. Census Bureau’s Current Population Surveys and from the Medical Expenditure Panel Survey by the U.S. Agency for Healthcare Research and Quality. SHADAC is in the U’s School of Public Health.

Fewer employers covering workers
Employer-sponsored insurance in Minnesota also declined to 69.9 percent of the overall non-elderly population in 2008 from 78.4 percent in 2000. The national level fell to 59.9 percent of the non-elderly population in 2008 from 66.1 percent at the start of the decade.

And here’s how the middle class was affected during two recessions in the decade. Minnesota families of four fared slightly better than the U.S. population in the $45,000-to-$88,000 income category (200-399 percent of 2010 Federal Poverty Guidelines). Employer-sponsored insurance for Minnesota families fell 6.2 percentage points to 72.7 percent of the population in that income category. Employer-sponsored insurance for U.S. families of four in that category dropped 7 percentage points to 66 percent of that population.

“For middle-class families, changes in the cost of insurance far outweigh changes in income,” said Dr. Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation, in a prepared statement. “That means a bigger piece of the household budget must go to insurance, or families have to go without coverage, delay needed care and face bankruptcy if anyone in the family gets seriously ill. Business owners can’t afford to shoulder more of the burden of health care costs. And states can’t afford the influx of laid-off workers into public programs. It’s a crisis in need of solutions.”

It could be worse...
The “good news,” SHADAC deputy director Julie Sonier told MinnPost, is that Minnesota employers didn’t shift as much of the increased costs to employees as they could have. Employers’ share of the family premiums increased 81 percent while employees’ costs increased 54 percent, she said.

Isn’t that still a lot for employees to shoulder?

“It’s a lot compared to the decrease in median household income,” said Sonier, former director of the Minnesota Department of Health’s Health Economics Program.

The median household income in Minnesota fell 10.4 percentage points to $57,607, while the U.S. median income declined 2.5 percentage points to $51,233. And those figures are adjusted for inflation, she said.

“In the last few years in Minnesota, the jobs that we have lost have been, for example, more concentrated in manufacturing and industries that are more likely to come with health insurance,” Sonier said.

But why are the trends hitting the middle class, in particular?

Public health programs picked up a significant number of those people no longer covered by employer-sponsored insurance because they lost their jobs or ended up working for employers who didn’t offer benefits. Still, the state’s uninsured rate climbed to 9.1 percent in 2008 from 6.8 percent in 2000. The nation’s uninsured rate grew to 16.7 percent from 15.1 percent.

“There are a lot of people who don’t have the option of signing up in a public program,” Sonier said. “Their income is too high or they’re not eligible for some other reason. So you see the public programs playing more of a safety-net role in the lowest-income groups. But the middle-income groups really don’t have that available, and that’s the group where it’s also less likely that they would be able to afford individual coverage on their own.

“So that’s the group that’s really, in many instances, the most vulnerable when employer- sponsored coverage goes away as an option,” she said.

Casey Selix, news editor and writer for MinnPost.com, can be reached at cselix[at]minnpost.com. Follow her on Twitter.