The Iowa Farm Bureau’s tailored health insurance plans might be harmful to the state’s insurance market and to the farmers the plans are meant to cover, according to a national analysis on skinny health insurance.
The analysis, released by the Center on Budget and Policy Priorities, a Washington, D.C.-based progressive research center, says that states expanding “skimpy” health plans, which includes coverage proposed by the Iowa Farm Bureau, for residents with limited coverage options are poor proposals that “would do more harm than good” for farmers and farmworkers who lack health insurance coverage.
“The proposals’ supporters at times invoke middle-income farmers as a key constituency for these more limited coverage options,” the analysis states. “But this group does not represent the vast majority of farmers and farmworkers experiencing health insurance challenges.
“Most farmers and farmworkers who lack health insurance have low incomes, and for them skimpy plans would be inadequate and unaffordable.”
About 4,680 Iowa farmers and farmworkers are uninsured, about 9 percent of the total 51,550 population, according to the analysis, based on 2016 data from the Census Bureau.
Of those uninsured individuals, 57 percent make below 200 percent of the federal poverty level, or about $48,000 for a family of four.
The Iowa Legislature passed a bill — which was subsequently made law by Gov. Kim Reynolds in April — that will provide coverage for farmers, small businesses and other Iowans who no longer can afford independent insurance plans, but are not subject to state oversight or federal regulation.
The plans are likely to be available for 2019.
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These plans, which would be offered by Wellmark Blue Cross and Blue Shield for Iowa Farm Bureau members, are described as skinny as they only offer limited benefits and do not meet bench marks required by the Affordable Care Act.
The plans also are not regulated by the state insurance commissioner.
The analysis names Iowa’s plan specifically, stating that in the worst-case scenario the plan could “deny coverage to people with pre-existing conditions, provide coverage to such people but decline to cover their pre-existing conditions, charge far higher premiums based on a person’s health status, age ... and leave out benefits such as maternity care and prescription drugs.”
Sarah Lueck, senior policy analyst with the Center on Budget and Policy Priorities and a co-author of the analysis, said she foresees these skinny coverage plans harming individuals who have signed up for them, then experience an unexpected illness and injury.
In addition, Lueck said these plans also will draw healthy people out of Iowa’s individual marketplace, thus causing those who purchased regular coverage to face premium increases that may not be softened with subsidies.
“The people who get subsidies are protected from those increases, but the people who don’t get those subsidies, who have middle incomes or higher that want comprehensive coverage are going to have trouble affording it — more trouble than they’re having now,” Lueck said.
Iowa Farm Bureau officials have stated the plan aims to help its members whose income is too high to qualify for financial assistance but who do not make enough to afford the cost of ACA health insurance that’s available on the individual marketplace.
In addition, several small businesses could join together to offer their employees health coverage.
However, Lueck argued these members just may not be aware of what financial assistance for which they qualify.
“When we’re hearing people complaining and being concerned about the affordability of their health coverage, the solution isn’t, ‘Well, let’s go make some insurance expensive for other people in order to give some groups of healthy people cheaper coverage that isn’t as protective of them if they need it,’” Lueck said.
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The analysis states these skinny options “won’t solve health care affordability problems for most people working in agriculture, especially if they face illness or injury.”
“You’re creating a shadow market subject to a weaker set of rules,” Lueck said.
“A person might be able to benefit in the short term if their healthy and their younger, but there’s lots of people who are going to be hurt.”
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