Nebraska Farm Bureau’s health insurance program off to solid start
WASHINGTON — The Nebraska Farm Bureau has signed up 700 people for its new health insurance plans.
The Farm Bureau partnered with Medica to offer the plans, which have premiums roughly 25 percent cheaper than those offered through the state’s Affordable Care Act exchange, not accounting for any subsidies.
Geoff Bartsh, Medica’s vice president of individual and family business, said that 700 number isn’t bad for a plan announced at the end of September.
“Which tells me there really was a group of farmers and ranchers who couldn’t find an option that met their needs,” Bartsh said.
And he said those numbers could grow significantly in the future with more time to promote the plans.
Rep. Jeff Fortenberry, R-Neb., sought to include a provision in the new farm bill promoting association plans like those offered by the Farm Bureau, but it was stripped out of the final version.
Rob Robertson, the Nebraska Farm Bureau’s chief administrator, said the group was disappointed to see Fortenberry’s language eliminated in part because it would have included seed money in the form of grants and loans to help with startup costs for such plans. The Nebraska Farm Bureau spent more than $200,000 setting up its program, Robertson said, with much of that covering the cost of complying with the various state and federal regulations.
Robertson said the plans are saving thousands of dollars for people who weren’t getting subsidies on the exchange.
The Farm Bureau’s insurance offerings are treated like large group plans but are ACA-compliant. That means the premiums can be rated based on factors such as age but not health status. So there’s no denying someone just because they have diabetes, for example.
“We’re not cherry-picking healthy people,” Robertson said.
Those who enrolled for 2019 must have joined the farm group by July 1, 2018.
“We want to avoid adverse selection,” Robertson said. “We didn’t want the next 100 members of Nebraska Farm Bureau to need knee replacements.”
They will take a similar approach going forward, so those signing up for 2020 will need to become a member by mid-2019.
Enrollees must also demonstrate that they are involved in agriculture. Robertson expects more of their members to sign up in the future.
The plans are particularly attractive to farmers and ranchers who were buying in the individual market but weren’t eligible for subsidies.
Bartsh said there’s no particular magic to the lower premium.
“It’s a matter of looking at the potential claims that are going to come through this association membership versus the claims we’re seeing in the larger individual market,” Bartsh said. “We had an opportunity to just assess who the potential association members would be and their health risk is lower than the remaining individual market.”
There are 90,000 people on the individual market in Nebraska. Bartsh said he doesn’t see an erosion in that from association plans.
“The associations in our mind are really targeting again either people who have left the market already or those people who are still in the market but don’t receive a subsidy,” Bartsh said. “And that’s just a small overall portion.”
Meanwhile, across the river in Iowa, that state’s Farm Bureau is offering an “underwritten health benefit plan” that is not ACA-compliant. So applicants must pass underwriting, which means they can be denied or charged more based on pre-existing conditions.
Iowa Farm Bureau spokeswoman Laurie Johns said in a statement that the group has seen a “steady influx of applications” but did not provide numbers.
“From the beginning, the Farm Bureau Health Plan was not designed to take the place of ACA,” Johns said. “Those who qualify for tax credits (subsidies) will likely find the ACA the most affordable option for them. A significant majority of ACA enrollees receive tax credits, which greatly reduces their premium cost and makes those ACA plans a more cost-effective option.”
Health policy experts have warned that association plans, particularly if not ACA-compliant, could pull younger and healthier individuals out of the exchanges and drive up premiums there.
Still, not everyone is abandoning the exchanges.
Tiffany Lechtenberg’s family owns NorthView Family Farms in Spencer, Nebraska, where they raise cattle and grow commercial alfalfa along with other crops.
They had previously lauded the Farm Bureau for creating the insurance plans but ultimately opted not to join for 2019.
“We looked it over for our family and found that staying on Obamacare was less expensive for us,” Lechtenberg said. “But it was nice to have an option.”