If there is anything that could derail your business literally overnight, it’s a serious injury or illness in your family.
That’s why health insurance is an absolutely critical risk management tool, even though the cost of the insurance itself can also strain your business. While it probably won’t cover every medical expense for your family, it can protect you from the catastrophic effects of a major health event.
The majority of farm families agree with that sentiment, according to a 2017 study by HIREDnAG. The survey of nearly 1,000 farm families in 10 rural states found more than 75% of the respondents viewed health insurance as an essential risk management tool.
At the same time, however, many farm families still roll the dice by going without health insurance. The most recent USDA data on the subject shows more than 10% of U.S. farm households do not have health insurance, which is slightly higher than the general public. But even more telling is the type of farms that forgo it the most: dairy farms. They made up more than 40% of all farm households without health insurance, which is more than double any other type of farming enterprise.
Options to Cover Your Family
For those who are insured, many farm families rely on off-farm employment to secure health insurance — about 56% according to the USDA data. But what options are available for the rest of the families or individuals who wish to purchase their own coverage? Penn State University Extension’s Maureen Ittig, family well-being educator, and Ginger Fenton, dairy educator, recently presented a webinar where they shared the following suggestions:
- Health Insurance Marketplace. The Affordable Care Act (ACA) of 2010 created the federal Health Insurance Marketplace. Americans who do not have access to employer-sponsored health insurance can secure coverage through the marketplace, which provides credits for factors like income and family size. A handy calculator to estimate credits and plan costs can be found here. All ACA-compliant plans must cover 10 categories of services that includes things like prescriptions, pediatric care and emergency room services. Open enrollment for ACA plans is usually in the fall, but special circumstances can allow for enrollment throughout the year.
- Medicaid/CHIP plans. Lower-income families may qualify for Medicaid and/or Children’s Health Insurance Program plans. These plans vary by state. They typically are less costly to families and may provide additional services, like dental and vision coverage, compared to ACA plans.
- Association-based plans. Farm organizations and cooperatives may offer group plans to farmer-members. These organizations also offer guidance to help farm families understand the “language” of health insurance and aid in decision making.
- HSAs. Using a Health Savings Account (HSA) is a popular way for farmers to maximize their health insurance dollars. HSAs are actual bank accounts that families fund annually and can be used to cover qualified health expenses. Any dollars not used can remain in the account for expenses incurred later on and even invested into higher-yielding financial funds. To access an HSA, the insured must have a High Deductible Health Plan, which can be accessed via insurance brokers, association-based plans, or the Health Insurance Marketplace. HSAs offer the “triple-treat” tax advantages of pre-tax contributions, tax-free growth and no tax on qualified withdrawals.
- Skinny and gap plans. Some states allow for skinny plans that have lower premiums, largely because they are not required to offer the ACA-required 10 categories of services, like allowing entry with pre-existing conditions or maternity coverage. They also may have lifetime payout limits. Gap plans offer short-term, emergency coverage in some states. After 180 days, the insured must enroll for new coverage. They also may have exclusions and lifetime limits.
- Armed forces health insurance. According to the 2022 Census of Agriculture, about 9% of U.S farmers are veterans. They and their families are usually eligible for TRICARE or Department of Veterans Affairs (VA) health insurance programs.
- Healthcare sharing ministries. Several faith-based group health coverage ministries are available that share healthcare costs among their members. This is not health insurance, but many users find they are able to negotiate rates with providers similar to discounts offered to insurance companies. Enrollment may require specific belief systems and lifestyle choices (no tobacco or illegal drug use, for example). Users pay monthly fees similar to health insurance premiums. When they incur an expense, they pay their bills up front and then submit them for reimbursement.
The Penn State experts advised looking not only at costs, but also at the services your family might need, such as maternity and mental health coverage.
“The array of options available hopefully will allow you to pick an option that works best for you, your budget and your values,” Fenton notes.
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