Health care takes hefty bite out of Minnesotans' incomes

You've heard of the uninsured. Now meet the underinsured.

Health care costs are taking a hefty bite out of Minnesotans' family incomes, even if they have insurance, according to a report out Wednesday.

Almost 1.1 million Minnesotans can expect to spend more than 10 percent of their pretax incomes next year on health care. For a quarter of those, the cost will be even higher: more than 25 percent of pretax incomes.

Most surprising was that about nine out of 10 of them have insurance, according to the report by Families USA, a nonprofit, nonpartisan group based in Washington. While the uninsured have attracted the most political attention, the study points out that it's those who have coverage who are shouldering the cost increases, as employers pare benefits or those benefits fall short of the true cost of health care.

Darrell Siewert of Spring Lake Park knows what that's like.

A security guard earning $25,000 a year, Siewert spends $43 a week on a health plan offered by his employer.

But he has a heart condition and burns through that coverage by April each year. For the rest of the year, his salary level qualifies him for free care from Allina Hospitals and Clinics.

Last year, for example, he had a CT scan that wasn't covered, which cost $500. He says he spent all year paying it off. He gets seven medications, which cost between $50 and $100 as they are refilled each month.

In 2003, Siewert said, he filed for bankruptcy. Recently, his truck was repossessed.

The report's numbers support what those who work with sick people say they already know.

"We see every day those who are forced to choose between getting the medical care they need and putting food on the table for their families," said Walter Frederickson, executive director of the Minnesota Nurses Association.

At Allina Hospitals and Clinics, spokesman David Kanihan said, "We definitely see an increase in patients with insurance who end up with balances larger than they used to be." He added that many of those patients have high-deductible plans.

How Minnesota compares

Minnesota, which regularly ranks among the healthiest states and has some of the lowest numbers of uninsured, fared around average nationally in this report.

About 23.4 percent of the state's population younger than 65 will spend more than 10 percent of their pretax family incomes on health care in 2008. That compares with a national average of 23.3 percent, said Kim Bailey, who co-wrote the report.

Asked why Minnesota -- with its higher-than-average incomes and lower-than-average medical spending -- didn't fare better, Bailey said it could be because of differing demographics and/or different kinds of health plans. "We are simply reporting the numbers we have seen," she said.

The Minnesota Department of Health didn't have an answer to that question either. But Julie Sonier, director of health economics, said the report's other figures citing rising costs were consistent with what she was seeing.

"Quality health care is just out of reach for far too many families," said U.S. Rep. Betty McCollum, D-Minn., after the report's findings were announced. "Even those with insurance are going to start filing for bankruptcy."