Marilyn Andersen raises angora goats and llamas for wool that she spins and weaves in her studio at Two Cedars Weaving in Story City, Iowa.
She also has a part-time job coordinating distribution of local produce through a service called Farm to Folk. Neither effort comes with health insurance.
鈥淩ight now I have health insurance through my husband鈥檚 job but that is going to end when he retires in a few months,鈥� she said recently, 鈥渁nd so I鈥檝e just begun a search for health insurance for myself.鈥�
Andersen will be joining many farmers and ranchers who buy individual health insurance. Jon Bailey has studied this issue at the Center for Rural Affairs in Lyons, Neb., and he said that the high number of rural residents who purchase insurance on the individual market means changes to that market are a bigger deal in those areas. Nationally, Bailey said, about 36 percent of farmers and ranchers buy health insurance as individuals. Only five percent of all Americans get it that way. However, as a group, farmers and ranchers are more likely than the overall population to have insurance.
鈥淭hey generally have significantly lower rates of uninsured than the rest of the population,鈥� Bailey said. In a study he conducted in Iowa, he found that 93 percent of Iowa farmers and ranchers have health insurance compared to 88 percent of all Iowans and 84 percent of all Americans.
鈥淚t may not cover very much, or very well鈥攅xcept for catastrophic conditions鈥攁nd it鈥檚 expensive, but they have it to protect their farm,鈥� Bailey said.
An intensely physical occupation, farming requires a lot from farmers鈥� bodies. Farmers and ranchers have to be fairly healthy to do their jobs and make a profit.
鈥淚t鈥檚 never been an option for us not to have health insurance,鈥� said Ann Franzenburg, who farms row crops, vegetables and cut flowers full-time with her husband in Van Horne, Iowa.
Franzenburg buys a family policy through the Farm Bureau 鈥� a high-deductible plan paired with a Health Savings Account. So when grains sales are up, for example, Franzenburg says she puts more in the account. Even though her healthy family of five hasn鈥檛 had major medical needs, it鈥檚 expensive.
鈥淗ealth insurance is a giant chunk in what we have to pay in our budget every year,鈥� Franzenburg said.
As the Affordable Care Act is implemented, a greater percent of people in rural communities will feel its reach because so many rely on individual policies. David Lyons, CEO of CoOpportunity Health, a new co-op health insurance carrier that plans to offer individual policies in Iowa and Nebraska, says health insurance co-ops may especially appeal to rural residents because the co-op model is familiar.
鈥淢ember-run, member-driven non-profit opportunities are how a lot of the industries in rural America have been built,鈥� Lyons said.
Lyons cites rural electric co-ops and grain co-ops as examples. He said CoOpportunity Health wants farmer-members so it can leverage their risk-management expertise.
鈥淲e represent a model that they鈥檙e very comfortable with in an industry that they鈥檙e pretty uncomfortable with,鈥� Lyons said.
Lyons said CoOpportunity鈥檚 members will figure out themselves how to reduce healthcare costs鈥攑erhaps by focusing on prevention鈥攁nd then members and doctors will all share in the savings.
The Affordable Care Act also has provisions to help new players鈥攍ike CoOpportunity鈥攃ompete against the biggest insurers. In Iowa, that鈥檚 Wellmark Blue Cross Blue Shield.
From its sleek, modern downtown headquarters in Des Moines, Wellmark covers most individuals in Iowa鈥攊ncluding the Farm Bureau member policies. Wellmark鈥檚 director of actuarial services Pat Ryan said there鈥檚 no distinction between rural and urban in policies. As the new law goes into effect, though, he said more risk is shared across more people, which will impact rates.
鈥淎ny given person, depending on where they鈥檙e being rated at today, could see an increase or decrease,鈥� Ryan said.
Right now, for example, younger men typically pay lower rates than women the same age. But at the other end of the spectrum, older women pay less than men. In the new environment, Ryan said the people currently paying less may pay a little more while those paying the most now could see reductions.
Ann Franzenburg is quite familiar with rate increases鈥攍ast year her family鈥檚 policy went up 12 percent and on April 1 it鈥檚 going up another 13 percent.
鈥淎nd I don鈥檛, frankly, see it getting any better,鈥� Franzenburg said. But she already has some experience shopping around鈥攈er middle child is a college student and now gets insurance through his school. It costs about the same, Franzenburg said, but the coverage is more robust. Her younger son has sometimes qualified for the state鈥檚 children鈥檚 health insurance program, though he鈥檚 been on the family Farm Bureau plan, too.
Lyons said the creation of health care exchanges, also a mandate of the new law, will mean customers like Franzenburg can go to one place and see all of the options in the marketplace. Lyons predicts farmers will benefit from this system, both because some will qualify for subsidies to help pay for policies purchased through the exchange and because they鈥檙e not afraid to comparison shop.
鈥淚f I can go to the exchange, and I make less than $44,000 per year, roughly, as an individual or $92,000 as a family of four, and I can get the policy I want that manages the risk the way I want it, and significantly reduce the out of pocket cost for my family, I鈥檓 going to do it,鈥� Lyons said.
Farmers, like other small business owners, are comfortable shopping around for the best deal.
Bailey, of the Center for Rural Affairs, said the critical piece for rural communities is access鈥攖o insurance, to providers and in the coming year even to the exchanges, which are expected to be Internet-based. But whatever the challenges, he said farmers and ranchers are committed to having health coverage.
鈥淭hey see health insurance in a big way as bankruptcy insurance,鈥� Bailey said. 鈥淪o that an illness or an injury doesn鈥檛 bankrupt the whole operation.鈥�
