The Minnesota 17% uninsured crisis

You are reading this because the headline got your attention. You think you know that Minnesota does not have a 17% uninsured rate. In fact, you know that Minnesotans without health insurance, according to a 2007 Minnesota Department of Health, amounts to about 7.2 percent of the population.

So what’s with this 17% thing?

Minnesota law mandates that everyone who drives a car must have auto insurance. We have an auto insurance crisis in Minnesota, with somewhere near 17% driving without insurance. This far exceeds the state’s health uninsurance rate.

Car insurance is mandated by law. Health insurance is voluntary (for now). And yet, the health uninsurance rate is far below the auto uninsurance rate.

While pointing these facts out during a presentation several weeks ago, I think I found the real answer. Please, no one tell the politicians what I am about to suggest.

Employer-based insurance

A disclaimer is required. What I am about to say is written with my tongue planted firmly in my cheek, but I am saying it for a profound purpose:

What if governments allowed employers to provide auto insurance for their employees, and then gave employers the right to deduct that insurance expense? If auto insurance was a regular employer benefit, would the rate of uninsurance still be at 17%? Or would it be more like, say, 7.2%?

While I am not suggesting that auto insurance be made an employee benefit, I am saying this, and I hope, saying it clearly: One of the key reasons that our uninsurance rate in Minnesota is only at 7.2% is because employers provide health insurance.

Let me say it another way: If employers did not provide health insurance, our health insurance uninsured rate would probably be at 17%, or more, even if the state mandated it.

Let’s be clear about this idea that individual health insurance is the best way to go: It may be, but it carries with it the very real potential of driving up the uninsurance rate. With or without a legislative mandate requiring the purchase of health insurance, there is no doubt whatsoever that uninsurance rates would climb.

I share this because of my political crystal ball. Those who prefer a government-managed, single-payer system seize on the uninsurance rate to justify it. Why would any sane, market-oriented person want to give them more ammunition for their argument?

The best answer is to maintain choice. Let employers decide, as they do now, whether to provide group insurance and in what form they will or will not provide it. That is a free market.