I grew up on a farm in a very rural area. The nearest doctor was 20 miles away, same as the nearest pharmacy. If we needed care beyond basic primary care, we had to travel farther away. Family members needing specialized care like surgery routinely travelled 200, 300 and farther to receive it. When my father experienced an emergency, he had to fly by ambulance to a bigger hospital 200 miles away.
Before they qualified for Medicare my parents had individual health coverage through Farm Bureau, who also insured our cars, home and farm equipment. The plans were rated for risk. The Kaiser Family Foundation reports that states are increasingly allowing Farm Bureau plans that are exempt from Obamacare regulations. The following is from Kaiser Family Foundation:
But because states have passed laws exempting farm bureau health plans from health insurance requirements, they don’t offer many of the coverage protections provided by insurance. That means their benefits and coverage rules may be less generous or predictable than Obamacare plans.
Generous? Obamacare is only generous if you are extremely sick and have reached your maximum out-of-pocket cost sharing. For most people (nearly 90%) ACA plans are an expensive plan that pays none of your medical bills because you have not met your deductible. They are only affordable if you qualify for generous public subsidies. More from KFF:
Crucially, farm bureau plans don’t have to accept everyone who applies for coverage. People must pass underwriting first, a process in which plans evaluate applicants’ medical history and health conditions and decide whether to offer them coverage. This practice was routine before the ACA passed, and people were often rejected due to preexisting medical conditions.
Because farm bureau plans can turn down people with expensive chronic conditions or a history of cancer or other medical issues, farm bureau plans may be 30% to 50% cheaper than unsubsidized marketplace plans, plan managers say.
KFF does not mention that virtually all individual health plans prior to the Affordable Care Act required guaranteed renewability for those with continuation of coverage (no coverage gaps of more than 62 days). Even the high-risk pools seem to be cheaper than Obamacare, which is little more than a high-risk plan with unlimited benefits once you reach your sky-high deductible.
Four states passed laws allowing farm bureau health plans law year, including Missouri, Alabama, Florida, and Ohio. In all, 14 states allow farm bureau plans. KFF worries that farm bureau plans can reject someone for any condition. Plans in Missouri (and elsewhere) do not have to cover preexisting conditions for six to 12 months. Plans can deny coverage for known risks for two to seven years. It is not really discussed that accepting people with known risks or preexisting problems is not insurance, it is a subsidy from others who must overpay. The purpose of requiring continuation coverage was to prevent people from dropping out of the market when they are healthy and joining when they need medical care. More from KFF:
“People don’t like that we underwrite, but if we did everything like the ACA, we’d be just like an ACA plan,” said Jason Beard, general counsel and chief compliance and privacy officer at Tennessee’s Farm Bureau Health Plans. “We’re trying to be an option for folks that would otherwise not have coverage.”
Under the Missouri law, once someone is covered by a farm bureau plan, they can’t be kicked off or charged a higher rate if they get sick. That’s also true for the nine other states where Tennessee administers the plans, Beard said.
“We do not contractually have the right to raise premiums or cancel plans based on [an individual’s] health experience,” he said.
Public health advocates and advocates for disease conditions do not like the plans because they allow a type of underwriting. Yet, they admit that ACA plans are so expensive that many people are looking for alternatives. However, they never admit that the ACA’s so-called consumer protections are what is driving up the cost of Obamacare to levels few people can afford without generous government subsidies. Farm Bureau plans sound like a great option for many people.
KFF Health News: Farm Bureau Health Plans Beat the ACA on Prices With an Age-Old Tactic: Rejecting Sick People
Also see WaPo: More states are offering cheap health plans to farmers, with a catch
I had FB health coverage in the early 1980s. As I recall, the premium was around $360 _a year._ I don’t recall whether I ever had any claims against it though.
Thanks for an excellent article on Farm Bureau plans. Here is another way to describe what has happened.
Let’s say that 5% of the people under age 65 have an active diagnosis of cancer or heart disease, et al.. They are doctoring for the diseae right now, or will likely be doctoring for it pretty soon.
Before the ACA, some of this population held on desperately to their employer coverage, and some were basically health care beggars.
The ACA swept all this aside with its guaranteed-issue requirements. The smart guys in the room knew that insurance premiums would go up for all, so they plugged in subsidies to help the middle class.
But subsidies require actual congressional approval. If we were grownups, we would raise taxes when and if more public funds were needed. Germany has done this several times with its national health insurance. Not here, though.