Health Insurance for Rural Workers
This article was posted April 2006.
The rising cost of health care ranks among the top concerns of Americans nationwide. For the past decade or more, the result has been double-digit increases in health insurance premiums almost every year. Four out of five people with health insurance receive coverage through their employer. But with costs rising, most employers have either reduced health care benefits or passed premium increases on to employees. Some have eliminated coverage altogether, and the number of uninsured people has been rising steadily.
North Carolina exceeds the national average for the percentage of its nonelderly population lacking health insurance. For the 2002-03 year, nearly 1.4 million North Carolinians age 64 or younger lacked health insurance (22 percent of the population for the age group). This placed the state sixth nationwide in the number of uninsured.
Small businesses are especially hard-pressed to offer coverage. They lack the buying power to negotiate better rates with insurers and lack the capital to absorb premium increases. Furthermore, many insurance companies have pulled out of the small-group market. As a result, the number of businesses with 50 or fewer employers proving health insurance has decreased significantly. Only 35 percent of North Carolina's small businesses offered health care coverage in 2002-03, down from 41 percent just the year before.
In rural North Carolina, the picture is especially grave. Rural residents are less likely to have health insurance coverage. Historically, manufacturing could be counted on to provide jobs with good benefits for rural workers. Now, manufacturing jobs are dwindling, and the jobs workers find to replace them typically do not provide health insurance.
As the Rural Center works to revitalize the rural economy through entrepreneurship and small business growth, it recognizes rising health costs as a major impediment. The businesses themselves share the concern. Surveys of North Carolina's small business owners consistently rank health insurance as their biggest concern. This was reiterated in a series of meetings the Rural Center held with entrepreneurs in 2003. In these meetings, entrepreneurs said the rising cost of health care seriously threatened their ability to attract and retain good employees.
To address the issue, the center began an investigation of the health insurance crisis and as a first step issued the six-page report, "Health Insurance in North Carolina: Growing crisis puts small business, rural workers at risk," which documents the high proportion of rural workers who lack health insurance coverage. The center also collaborated with legislative staff in drafting legislation to establish the N.C. Health Insurance Innovations Commission, charged with finding affordable solutions for health insurance coverage for small businesses.
In addition, the Rural Center served on the Covering the Uninsured Task Force of the N.C. Institute of Medicine. Among 13 recommendations issued in April 2006, the task force has called for creation of a subsidized health insurance product targeted to employers with 25 or fewer employers, low-income sole proprietors and low-income individuals not covered by other group programs. All 13 recommendations and background are included in the report, Expanding Health Insurance Coverage to More North Carolinians. Rural Center Chairman Tom Lambeth co-chaired the task force with Carmen Hooker Odom, secretary of the N.C. Department of Health and Human Services. Center President Billy Ray Hall also served as a task force member.