Healing Hands How some states are easing the health-insurance burden

Providing employees with health coverage is a struggle forCarrie Howard, co-owner of DJ's Industrial Rubber Products, a six-employeeOklahoma City company that sells fire-hose fittings. Even with 2005sales at $1 million, the company can't afford to cover itsemployees. Howard says, "If they could have a $20 co-pay, orany help with prescriptions, they would do it."

Howard, 42, and the company's employees could get help verysoon from the state government. In November, Oklahoma startedOklahoma Employer/Employee Partnership for Insurance Coverage, avoter-approved statewide health insurance program for companieswith fewer than 25 employees. Funded largely through a tobacco taxincrease, the state picks up 60 percent of an employee'spremium, the employer pays 25 percent, and the employee pays theremaining 15 percent.

The program will help Oklahoma's small employers providebenefits and reduce the number of Oklahoma'suninsured--currently 600,000. Within the first few weeks of theprogram, 206 companies had submitted applications, and its mailinglist has ballooned to 4,500 subscribers. "We've had a tonof phone calls," says Matt Lucas, project director for theOklahoma Health Care Authority, which is administering theemployer/employee partnership. "It's a fairly innovativeprogram."

Oklahoma isn't alone. An October 2005 study by the KaiserFamily Foundation on Medicaid and the Uninsured found 20 stateshave increased access to health-care options. Illinois' new AllKids plan will provide affordable health-care coverage to uninsuredchildren of working parents. The Massachusetts legislature,meanwhile, is debating whether to require residents to carryhealth-care coverage via an employer, the government or aself-funded policy, with low-income individuals qualifying for asubsidy, and potential tax breaks for employers who provide healthinsurance.

"States are all over the map in terms of what they'redoing," says John E. McDonough, executive director of HealthCare For All, a Boston group advocating accessible and affordablehealth care for all Massachusetts residents. "Some states arelooking at creative ways to help small employers."

State budgets are moving back into the black, and that'sallowing them to pump money into once-dormant initiatives. In 2005,45 states exceeded budget projections, and the other five met theirtargets, according to a recent report on states' fiscal healthby the National Association of State Budget Officers. Compare thisto 2003, when 37 states slashed spending halfway through theirannual budget cycles.

"I don't think [states'] interest in this issueever went away," says Alan R. Weil, executive director of theNational Academy for State Health Policy, a Portland, Maine,nonprofit that analyzes state health-care policy and practices,"but a sense of not having the resources to do anything aboutit [put progress] on hold."

Entrepreneurs struggling to pay for employee health coveragehave some new options, but they have to stay realistic: "Theresources available to help small businesses afford health coverageare limited," Weil says. "But there are enough statestrying to figure out how to extend some help to small businessesthat it's a good idea to [look into] what'shappening." Your state's insurance department is one placeto start.

Paying attention paid off for Howard: She signed up forOklahoma's new program the day it started taking applications."I read [about] it in the paper a long time ago and just triedto keep up on it," she says. At press time, Howard waspreparing to give employees insurance applications to fill out.

States still face their share of budgetary challenges; manystates are in debt from borrowing heavily during the downturn. Anddemand for Medicaid continues to increase. The big question is howlong politicians will leave it to states to triage a nationwidehealth-care crisis. "The only effective long-term solutionwill be national," says McDonough. "And it's not areal issue on the Washington, DC, radar at this point."