This story is the second in our Compromised Coverage series, where we explore insurance plans and alternatives and the problems that come with them. Read the first story here.
Farmers have long been at the mercy of seasonal and unpredictable earnings, making health insurance far from straightforward.
One year, they might barely break even and get some financial help with coverage. The next, they might make a hefty profit but find themselves ineligible for any Affordable Care Act (ACA) subsidies.
When the latter happens, their options are to go to the private market, get unsubsidized ACA insurance, rely on a spouse who has insurance through an employer, or go uninsured, Nebraska Farm Bureau Federation Chief Administrator Rob Robertson told Healthcare Brew. In any case, it can be costly for his state farm bureau’s 55,000+ member families.
“[Health costs are] a really big family farm disruptor,” Robertson said.
In 2015, the US Department of Agriculture and Economic Research Service found that nearly 11% of household members across the nation’s 2+ million family farms were uninsured, compared to about 9% of the general population.
Local offices of the American Farm Bureau Federation, a membership and advocacy organization, have a unique solution: farm bureau health plans.
These plans generally advertise their affordability compared to others, but they come with a twist: Health insurance alternatives like farm bureau coverage are not typically subjected to state or federal regulations, like those created by the ACA, John Dicken, director of healthcare for public health and private markets at the nonpartisan Government Accountability Office (GAO), told Healthcare Brew.
“It’s hard to make apples-to-apples comparisons, since these are not providing the same types of benefits or insurance for the same types of individuals,” he said.
Legal loopholes
Farm bureau plans are permitted thanks to state laws that say farm bureaus are not insurers, and thus don’t have to play by insurer rules.
These plans were first codified in Tennessee in 1993. To this day, the state has the most members—75% of the country’s total 130,000 counted as of March 2023, according to a GAO report. Since then, more plans have been cleared in several other agriculture-heavy states—the most recent being this year in Nebraska, where coverage is set to begin on January 1.
Eric Dunning, director of insurance at the Nebraska Department of Insurance, argued during the Nebraska Legislature’s hearing on the law that these non-ACA plans provide a more affordable option for some farm families.
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But the effectiveness of these alternative plans is hard to prove because there’s so little data available, Dicken said.
“It’s difficult to know to what extent they’re meeting individuals’ needs differently,” he said.
Not for everyone
A 2023 GAO report, which Dicken led, compared these plans alongside other health insurance alternatives like healthcare sharing ministries to more traditional health insurance.
One of the two farm bureau plans reviewed in the report had a waiting period before a member could receive benefits for maternity care and pre-existing conditions. The other had per-incident, annual, or lifetime benefit maximums—so, for instance, if a patient’s $100,000 healthcare bill exceeds the threshold, they’re out of luck.
The report found that both plans also did individual underwriting, meaning they can reject people with certain pre-existing conditions and charge varying premiums based on health and demographic information.
The ACA doesn’t allow insurers to do any of those things.
According to Robertson, the thought is that having healthier members allows the insurer to offer lower premiums because no one in the insurance pool would have very high medical costs.
“People say…‘What about the high-risk folks?’ And we said, ‘Well, there’s still the Affordable Care Act out there. It’s not like we’re taking that option away,’” Robertson said.
Nebraska’s plan, administered by Tennessee-based Farm Bureau Health Plans, does underwriting, doesn’t take on people with certain pre-existing conditions, and has a nine-month waiting period for maternity care, he said.
“We probably won’t accept everyone, but we’ll accept the lion’s share of them in terms of underwriting guidelines,” Robertson said.
Change ahead?
The flip side to trying to put a bunch of healthy people on one kind of plan is that other plans could disproportionately get people with higher medical costs—and that could drive up premiums, GAO’s report authors noted.
Dicken told Healthcare Brew that though this is hard to evaluate, GAO did not find evidence that enough people have enrolled in these plans to impact the rest of the insurance market.
But enrollment could change in the future.
Farm Bureau officials told GAO that the 2021 American Rescue Plan Act’s expanded subsidies led to a slight decline in enrollment in farm bureau plans in 2021 and 2022. These subsidies are set to expire at the end of 2025.