Companies keep kicking the coverage off workers.

• Position: ECONOMIC OUTLOOK - Interview

The number of Tar Heels with employer-provided health insurance dropped by more than half a million between 1999-2000 and 2003-04, according to the Economic Policy Institute, a Washington, D.C.-based think tank. The percentage of the state's population covered by such plans dropped 6.7 points, the second-largest decline in the nation. Adam Searing is director of the North Carolina Health Access Coalition, a nonprofit that tries to educate the public about health-care reform options.

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BNC: Why the big drop in coverage here?

Searing: First, health coverage costs a lot more than it used to even a few years ago. Last year, we saw premium increases of over 10% for job-based health insurance. Since the year 2000, we have seen premium costs increase by 59%. It's simple economics. When something costs more, there are more people who can't afford to buy it. The second reason is that North Carolina has lost a lot of higher-paying manufacturing jobs over the last five years. We have more service jobs, which usually don't have good health coverage.

Is this a Tar Heel phenomenon or part of a national trend?

According to a recent national study by the Kaiser Family Foundation and Health Research and Educational Trust, there has been a 9-percentage-point decrease between 2000 and 2005 in the percentage of companies that offer health insurance to their employees.

Is it any different here?

No. North Carolina, in many health-related factors, mirrors the country as a whole. We have a higher percentage of people who are uninsured, so we may have more companies that are dropping coverage here.

What can be done?

The North Carolina Institute of Medicine, a state-funded nonprofit policy group, has been considering a plan similar to the Healthy New York Plan, where the state sets up a $40 million-to-$50 million pool and takes over certain risks for some small-employer insurance plans. An insurance company would sell the plan, but the plan would be backed by the state pool. Any costs that are above a preset threshold, say $50,000, are taken over by this large health-insurance pool. This means that a small-business health-insurance product can be offered for a lot less money than other products that don't have that subsidy. That also means you have a lot of businesses that can suddenly afford health coverage. The institute is also looking at a more limited health-insurance package that would save money by covering almost everything except really...