The Rural Side of Health Insurance
Jack M. Geller, Ph.D.

Few issues are closer to the front burner of policy development today than the health care coverage debate. Today, health care is a sector where technology advancements and costs have soared and medical inflation (a term that was not in my vocabulary until a few years ago) far outpaces the overall inflation rate. The consequence is a sector that now makes up 16 percent of our nation’s gross domestic product. Of course the irony is that at the same time that medical technology, costs and medical inflation have accelerated, so too have the number of Americans who make up the ranks of the uninsured, now estimated to be inching close to 50 million.

When you think about it, Minnesota and healthcare seem to go hand in hand. We are the birthplace and home of the Mayo Clinic, one of the nation’s most prominent medical facilities. Our medical device industry is strong and sector-leading. We have one of the lowest percentages of uninsured residents in the nation, and we as Minnesotans routinely rank high as one of the nation’s healthiest people. And yet we know that all is not well or sustainable with our health care system.

Much of the policy debate seems to center on access to affordable health insurance, where states like Maine, Massachusetts and more recently California, are simply tired of waiting for a federal fix and have begun to take action on their own. Here in Minnesota we, too, are now hearing about ways to cover all children and provide affordable coverage to small businesses, farmers and other individuals who seem to be priced out or otherwise locked out of a decent health plan at an affordable rate. But seldom do we hear how all of these issues play out in rural Minnesota.

Fortunately, researchers at the University of Minnesota have been collecting data on such things for some time now. The good news is that their research suggests that while the number of uninsured families has traditionally been higher in rural Minnesota than in the metro area, that gap has been narrowing slightly. The bad news is that the narrowing is not due to an increase in the percentage of rural families securing affordable health insurance — in fact, it’s just the opposite. Studies show that between 2001 and 2004 the percentage of uninsured rural Minnesotans actually grew from 8.3 percent to 9.1 percent. On the other hand, the percentage of uninsured metro area residents grew at an even faster rate, from 5.9 percent in 2001 to 8.0 percent in 2004. And it will come as no surprise when I tell you that the entire loss of health insurance came from Minnesotans who reported losing their employer-based group coverage. This is true in both metro and rural Minnesota. Reported coverage through public insurance such as MinnesotaCare or Medicaid actually grew during this time period, as did the percentage of people purchasing individual health coverage.

Of course there are multiple reasons why people might lose their employer-based health insurance. Sometimes it’s as obvious as losing your job. But more and more we are hearing that the responsibility of providing health insurance is increasingly burdensome to employers. Today we hear that auto giant General Motors has more health insurance costs built into each vehicle they produce than they do steel. If that’s true, what chance does a small business have in negotiating an affordable health insurance plan for its employees? The consequence is that to stay competitive each year employers are forced to push more and more of those costs onto their employees, sometimes to the point where employees simply can’t afford to take the employer-offered insurance. And for some small employers these ever-increasing costs are just simply too overwhelming and they are unable to offer any kind of health plan to their employees.

What does all this have to do with rural Minnesota? Well, simply put, with more than three out of every four businesses in rural Minnesota having 10 employees or less (and often much less), many rural-based businesses are priced out of the health insurance market. It’s a situation that has increasingly led to programs such as MinnesotaCare to look more and more like a de facto rural health program. In a recent analysis, the Minnesota Department of Health reported that today only 26 percent of all non-elderly Minnesotans live in rural counties, yet they disproportionately comprise 39 percent of all MinnesotaCare enrollees.

As I thought about this statistic, it began to make more and more sense. After all, while not designed as a rural health program, MinnesotaCare is a public insurance plan designed to cover lower-income working families and individuals who are unable to secure health insurance through their employer, a situation more prevalent in rural Minnesota than in urban. But while it may make sense, is it sensible? The real question, of course, is how long can we go on with the status quo? If, as I suggested above, Minnesota and health care really go hand in hand, then there’s no better place in this nation for a thoughtful solution to emerge. It’s time for our leaders, both public and private, to step up.

(Dr. Geller is president of the St. Peter-based Center for Rural Policy and Development. He can be reached at