Working the Land, Buried by Medical Costs

By Beacon Staff

A new study on health care coverage for farmers and ranchers highlights a long-discussed and deepening concern: Families that live off the land have difficulty affording health insurance and, in many cases, spend a disproportionate percentage of their total income on premiums and out-of-pocket costs, especially in Montana.

The report, sponsored by the Robert Wood Johnson Foundation and conducted by the Boston-based health care watchdog The Access Project along with the University of North Dakota’s Center for Rural Health, examines health care costs in Montana, Iowa, Minnesota, Missouri, Nebraska, North Dakota and South Dakota. Montana tops the list in the number of uninsured farmers and ranchers, as well as several other categories, including the largest annual percentage of income spent on health care.

For the past five years, the Montana Farm Bureau Federation (MFBF), which represents 14,000 agricultural families statewide, has been searching for solutions to the problem. Scott Kulbeck, the MFBF’s director of membership development, said his organization has looked into numerous alternative health care options for its members, to no avail. But by next year the MFBF hopes to have an unprecedented, association-wide coverage plan in place. Kulbeck estimates it could save members up to 10 percent on health care costs.

“We are well aware of the fact that farmers and ranchers are having a hard time getting affordable health insurance – it is a huge need,” Kulbeck said. “The hard thing in Montana is that they haven’t been able to find plans that are worth it.”

Farmers share the same dilemmas that other independent employers and small business owners face in rural states. Most notably, they are often forced to buy into the non-group, individual insurance market, where premiums are more expensive. Kulbeck said the MFBF has researched plans “without all the bells and whistles” that would offer less coverage but have lower premiums and higher deductibles. But in Montana, there aren’t many options, which is a major reason rates are so high in the first place, he said.

State Auditor John Morrison, however, said lack of competition isn’t a larger concern in Montana than it is in other states. There are more than 300 health insurance companies in the state, he said, half of which fall under the umbrella of the non-profit Blue Cross and Blue Shield.

Morrison said a bigger factor for high health care costs in Montana is geography: A small population is dispersed over a large area. Supplying and maintaining hospitals and health care facilities across the state with appropriate resources is a difficult chore, he said.

“We don’t want people to have to drive unreasonable distances to get basic medical care,” Morrison said.

Farmers and ranchers also face challenges specific to their professions. First of all, their jobs are high risk, though Morrison is unsure how much this affects rates. They also can’t precisely predict their income for the year, as agricultural profit is subject to the whims of nature and market fluctuations. Furthermore, the farming population as a whole is getting old, said Carol Pryor, senior policy analyst for the Access Project. The Access Project is a health care research center and affiliate of Brandeis University.

“This is a problem for everybody, but farmers and ranchers are especially disadvantaged because of the market they’re in,” Pryor said. “And it is getting worse.”

Harmina Dykstra, whose husband Gary is a hay farmer in the Bozeman area, said her family’s health insurance premiums have jumped over 20 percent annually in recent years. From 1999 to 2004, she said the premium more than doubled, jumping from $360 to $790. Her family switched plans and got a slightly lower premium – still at the cusp of $800 and rising – but their deductible jumped to $10,000, leaving the door open for considerably higher out-of-pocket expenses.

“We’re not poor,” Dykstra said. “We’ve been blessed. But just because we’ve been blessed, what about people who haven’t been? How do they pay the premium?”

Still, Dykstra said the rapidly rising premiums, which far outpace her husband’s meager income increases, strain her family’s budget.

“It’s not like you can be without insurance,” Dykstra said. “I’ve got four kids. You’ve got to be covered.”

While Pryor is encouraged by the MFBF’s efforts to look at an association-wide solution, she cautioned against putting too much faith in that system. Kulbeck also said “we know even that’s not going to solve all the issues, but it’s going to be a step in the right direction.” Pryor said other state farm bureaus and organizations use similar plans, to limited success, where “they essentially broker (insurance).”

“We haven’t seen major discounts,” she said. “What the farm bureau is doing may be a good step but there have been issues in other states. It hasn’t always worked out as well as people hoped.”

But Pryor said the concept makes sense: Somehow farmers need to find ways into the group market.

“Ultimately there has to be an answer that includes some sort of pooling, but people have to construct these plans carefully,” she said.

To collect data for the report, which was released this month, researchers from the Access Project, University of North Dakota and Brandeis University conducted more than 2,000 detailed interviews with farmers and ranchers. According to both the report and people interviewed for this story, farmers often have to dig into their savings or retirement to cover health care costs. Some get supplemental jobs. Also, to avoid the burdens of the expensive non-group market, a burgeoning percentage go through the insurance plans of their spouses’ employers, if that option is available.

“The majority of farmers and ranchers have off-the-farm income,” Kulbeck said.

Thirty-six percent of Montana’s farmers in the report said they use other savings and income resources to help pay for health care costs, by far the highest percentage of the seven states. The median amount spent per household on health care in Montana, the report states, is $8,600, compared to the seven-state average of $6,700. The median amount paid by those purchasing in the non-group market here is $11,800, also the highest in the survey.

Answers aren’t easy to come by, as Kulbeck has discovered in his five-year search. Some families are looking beyond state borders. Sandy Courtnage of the Montana Farmers Union, which represents 2,500 families across the state, said her agency regularly hears from members about the hardships of keeping their families insured. She said the National Farmers Union has lobbied Congress and made other appeals to the federal government to address the issue for farmers and ranchers.

“It’s a big concern – some of them are looking for national answers,” Courtnage said.

Morrison pointed to an initiative, I-155, that will be on this November’s ballot called the Healthy Montana Kids Plan as a positive step for farmers and ranchers. The initiative is aimed at mitigating Montana’s uninsured children’s rate, which is among the highest in the nation. Under the plan, if passed, Morrison said “rural people will benefit disproportionately.”

Meanwhile, Dykstra and her family will be watching their premiums carefully, though she doesn’t expect a decrease anytime soon.

“We don’t go out to eat much, I recycle my baggies, we don’t get a raise – we just have to suck it up and deal with it,” Dykstra said.