Health for N.C.

State subsidies and tax credits for small businesses providing employee health insurance would be good for the economy

Waiting for the federal government to figure out how to insure all Americans for health care has left millions without coverage. Costs keep rising, and companies keep cutting employee health benefits out of their budgets.

In North Carolina, as a result, more than 250,000 people have no health insurance to pay for routine care to keep them well or to deal with day-to-day medical problems. Those who wind up acutely ill in hospital emergency rooms usually suffer even more personal financial misery and drive up health costs for everyone.

Much more must be done to deal with this complicated problem that affects so many Americans' quality of life. Fortunately, at the state level the N.C. Institute of Medicine has a plan that warrants attention. At least in the short run, covering thousands more Tar Heels while helping out small businesses sounds better than banking on the president and Congress for a national solution.

The plan touted by the Durham-based institute would pay 90 percent of costs in the range of $15,000 to $75,000 for people working for businesses that have fewer than 25 employees. (One third of those employees must earn less than $12 an hour.) Workers would have to make copayments for routine care, but at least they would have access. And they would be largely covered for the treatment of a major illness.

Employers and their workers would split the premiums 50-50, but companies could receive a tax credit. Besides that, businesses would have a health benefit with which to compete for skilled workers who can help them grow. Creating more jobs from the soil of North Carolina is the sort of economic development effort on which the state needs to focus.

People working for small businesses also are the most vulnerable to losing their health insurance. During the last business slump, the share of small companies offering employee health benefits fell nearly six percentage points. That was to be expected because insurance premiums kept marching higher. Yet companies rarely restore health benefits when sales pick up again.

During the last session of the General Assembly, legislators debated ways to help small businesses but came up empty-handed. Senators were pushing for subsidies while House members were pulling for tax credits, and both strategies have their critics. The institute's hybrid plan should have the advantage of grabbing the attention of legislators on both sides.

What's more, it's a far more equitable way of helping business than a top-bracket income tax cut would be. The Institute of Medicine's idea also helps Tar Heels at the low end of the income scale who bear a heavier burden every time lawmakers fearful of special interests raise the sales tax as the revenue path of least resistance. It's about time low-wage workers caught a break -- and providing better access to affordable health care is a good place to start.