One of the last bills to pass through the Kansas Legislature before the recess for the spring break could give the Kansas Farm Bureau the ability to provide health plans to Farm Bureau members. The proposed health plan is meant to act like health insurance, cover Kansans like health insurance, but is not health insurance. The bill makes the Kansas Farm Bureau one of approximately nine groups that are allowed to offer association health plans to their members.
The Farm Bureau has offered health plans to members in Tennessee for more than 70 years. The Iowa Farm Bureau started selling a health plan in 2018. The proposed health plan is specifically not insurance due to the language within the statute that provides an exemption for the health plan. Kansas Farm Bureau CEO Terry Holdren says the exception is how the farm bureau can afford to offer the plans.
“That allows organizations or entities who have that authority, like the Kansas Farm Bureau to then extend coverage that is based on more old school models of underwriting and rating,” says Holdren.
Mary Beth Chambers spokesperson for Blue Cross and Blue Shield of Kansas says the exception is not good for Kansans.
“When you carve out special concessions for one organization to sell something unregulated in a highly regulated marketplace, that’s just bad public policy,” says Chambers.
When asked why the Farm Bureau is getting what amounts to a regulatory carve-out Holdren notes that they are not the only group in the state allowed to provide association healthcare.
“We are in the section of the statute with 9 other entities; 9 other associations that are granted authority to offer health coverage benefits outside the jurisdiction of the state insurance commissioner,” says Holdren.
There is demand in the state for the type of health plan that the Farm Bureau would offer. A 2017 study by HirednAG found that 73% of farmers and ranchers said health insurance is a risk management strategy for their farms and ranches. Yet only 52% of those same farmers and ranchers were not confident they could afford a major illness.
For farmers and ranchers making too much money to qualify for Affordable Care Act (ACA) subsidies, also commonly referred to as ObamaCare, the rising price of health insurance can be too much for what are largely self-employed workers. Holdren believes this is where the Kansas Farm Bureau will gain subscribers.
“If you are getting an ACA subsidy in a substantial form. We are not going to save enough money that it is going to be attractive to you. Those folks will stay on the ACA plans,” says Holdren. “But higher income and middle-income earners are going to be attracted likely because the subsidies don’t apply and they are just on the full rack rate marketplace for plans. That’s the sweet spot for us.”
Chambers says that because Farm Bureau plan is unregulated all of the consumer protection and the mandated benefits that people are used to seeing associated with health insurance, won’t be in the Farm Bureau plan.
“We have concerns for those that are in the individual market that does not purchase through the ACA that purchase their own, so they are not getting assistance, the tax credits,” says Chambers.
Kansas is not alone in looking to expand health plans that operate outside the purview of the ACA. North Carolina was hoping to pass a similar bill, but that legislature voted it down. In 2017 President Trump issued an executive order to “promoting competition in healthcare markets.” The dismantling of the individual mandate in the ACA opened up states to consider the unregulated health plans like the one the Kansas Farm Bureau will be selling to farm bureau members.
Chambers believes a large problem with the demise of the individual mandate is not different plans being offered, but the potential of people not getting health insurance.
“The individual mandate going away the greater potential for the disrupting the insurance market with that is just that the healthy young folks will choose not to purchase health insurance and take themselves out of the pool because there is not the mandate that requires it,” says Chambers.
Holdren notes the Farm Bureau will have approximately 42,000 subscribers for the health plans. He credits the opening of the health insurance marketplace to competition for the Farm Bureau to provide their unregulated health plans to Kansas farmers and ranchers.
“The fact that the employer mandate doesn’t exist, or the individual mandate doesn’t exist anymore sort of allows us to sort of hit that space in a market that otherwise would have been difficult just because of the federal overreach,” says Holdren.
