Skimpy health plans: No solution

Skimpy health plans not a solution for Iowa’s uninsured farmers and farm workers

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by Sarah Lueck, Center on Budget and Policy Priorities


Skimpy health plans like the ones authorized to be sold by the Iowa Farm Bureau will likely be inadequate and unaffordable for many Iowa farmers and farm workers and will do more harm than good, according to a new report from the Washington, D.C.-based Center on Budget and Policy Priorities.  

An Iowa law passed this spring allows the Farm Bureau to offer health plans that are exempt from the Affordable Care Act’s (ACA) benefit standards and consumer protections, as well as state and federal insurance rules. 

Supporters have claimed these more limited plans will help farmers who make too much to qualify for federal subsidies to help pay their premiums: those with incomes at least 400 percent of the federal poverty level. However, the vast majority of Iowa farmers and farm workers struggling to find health coverage have incomes below that level, the new report finds. 

In fact, 57 percent of uninsured farmers and farm workers in Iowa have family incomes less than 200 percent of the poverty level (about $48,000 for a family of four). Another 33 percent have family incomes above that level but less than 400 percent of poverty. Many in these two groups are likely eligible either for Medicaid or for subsidies to help them afford good-quality insurance through the state’s marketplace, but may need more information or help with enrolling. 

Farm Bureau plans with premiums affordable to people with lower incomes are likely to offer extremely limited coverage, leaving anyone who buys them exposed to high costs if they experience an illness or injury. 

Plus, they are expected to increase premiums for middle-income people who want or need more comprehensive coverage in Iowa’s individual insurance market. A farmer who enrolls in a comprehensive individual-market plan will likely see higher premiums over time, as healthier people abandon the individual market in favor of skimpy plans and leave behind a sicker and costlier group of enrollees. 

And while some people will be lucky enough to remain healthy while covered by a skimpy plan, others will experience serious health problems or an injury and find their out-of-pocket medical costs to be overwhelming.

“Skimpy plans won’t meet the needs of most Iowa farmers and will harm many Iowans,” said Anne Discher, executive director of the Child and Family Policy Center in Des Moines. “People could end up with junk insurance that leaves them high and dry in a medical emergency, like a farming accident or serious illness.”

Farm Bureau plans aren’t the only type of skimpy coverage that could pose a threat in Iowa. Proposed federal rule changes would allow so-called short-term health plans to last up to a year, even though they are exempt from a number of consumer protections. Like Farm Bureau plans could do, short-term plans typically exclude people’s pre-existing medical conditions, charge very high deductibles and exclude maternity services, mental health care and substance-use disorder treatment.

“To truly help farm families, Iowa policymakers should focus on helping more people enroll in comprehensive coverage they may already be eligible for through Medicaid or the Marketplace, while also making premiums more affordable in the state’s individual insurance market,” said Mary Nelle Trefz, health policy associate at the Child and Family Policy Center. “An approach like that would maintain consumer protections and access to adequate coverage for people who work in agriculture, without further harming the Iowa’s insurance market and the people who depend on it.”


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