The new health care law leaves many unanswered questions
By Lekan Oguntoyinbo
In the past, insurance companies have rated farming as a high-risk occupation. As a result, farmers are disproportionately uninsured or underinsured, explains one expert.
The Affordable Care Act, which goes into effect in January, reduces the criteria health insurance issuers can use to rate consumers, says Roberta Riportella, Kansas Health Foundation professor of community health at Kansas State University. This new law could be of immense help to farmers, she says.
"You’ve had a lot of farm families where one person worked off the farm so they could get insurance for the family," Riportella explains. "Now they won’t be forced to get a job off the farm."
The new law prohibits insurance companies from rejecting individuals for pre-existing conditions.
"The no pre-existing condition is a positive benefit,"says Tim Mahaffey, executive director of the Farmers Health Cooperative of Wisconsin in Madison. However, he is concerned about the costs. "For those who don’t qualify for the small business tax subsidy (less than 25 employees), the cost could be high."
Moving Target. While the new law conveys several benefits, it could pose a host of financial challenges. Because the law is "a moving target" and is still being tweaked, experts and farm advocates say that it leaves many questions unanswered, such as how much will it cost farmers to cover themselves and their families if they try to buy insurance through the exchanges and whether farmers with more than 50 seasonal employees must extend coverage to them.
Greg Buckman, a fourth-generation farmer from Hallsville, Mo., who also sells health insurance, says most farmers he’s spoken with are uneasy about the new law because it is sure to lead to higher premiums.
He says the law forces insurance companies to pass on the costs to customers, particularly those who are healthy and haven’t had any difficulty getting insurance in the past. "I’d say 95% believe that Obamacare is a bad thing," says Buckman, who is also a regional vice president for the Missouri Cattlemen’s Association. "The 5% that do like it are the ones who can’t buy insurance."
Buckman pays $700 a month for a premium that covers him and two employees. The policy has a $6,000 deductible for each of them. As of December 2014, his monthly policy will increase by at least $250. He says another carrier has informed him that it plans to raise its rates by 32% next year.
Like the rest of the population, many farmers who live in states where there are a limited number of major carriers are concerned about being able to find affordable policies. There are also concerns that farm businesses that qualify for tax subsidies might see those subsidies eroded by exorbitant prices at the exchanges.
Wendy Fink-Weber, spokeswoman for the Western Growers Association, which represents about 2,500 farmers who grow labor intensive crops, says the new law presents a couple of overarching problems.
Seasonal Unknowns. First, these farmers hire scores of seasonal employees who receive limited forms of health insurance known as mini-med plans. The plans typically cover $50,000 or $100,000 of medical expenses, Fink-Weber says. "There are not a lot of deductibles," she says. "The workforce is healthy and a little younger than the general population."
Farmers are concerned about being able to afford the premiums if the new law requires them to buy more comprehensive forms of health insurance for their seasonal workers, she says. It’s estimated that 70% of seasonal employees are undocumented immigrants. Getting insurance for these employees would be impossible. "This has also given us the impetus to work on immigration reform," she says, adding that they are working to extend waivers to let them keep using these mini-med plans.
While it’s easy to question the unknown, observers are quick to tout other aspects of this law that could benefit farmers, such as tax subsidies for those who are income eligible. They note that it would also benefit farmers who are 50 and older. Mahaffey says some health insurance ratio rates for older to younger people are as high as 5:1. Under the law, the ratio cannot be higher than 3:1.
"As we’ve moved through the implementation, people are hopeful it will work, but they are apprehensive," says Pat Wolff, American Farm Bureau Federation senior director of congressional relations. "Employers are concerned about what they will have to do to comply with the law and what it will cost."
It’s these unknowns that trouble many. "We don’t know what the costs of premiums will be," Mahaffey says. "A farmer that has scaled back coverage and is now being forced to buy comprehensive coverage might be faced with sticker shock."