Main menu

Pages

How Does Farm Bureau Health Coverage Work?

Regulation Differs From Other Types of Coverage

In some states, the local Farm Bureau offers health plans to individuals or small groups as an alternative to Affordable Care Act (ACA)-compliant health coverage. The specifics of these plans vary across the states where they're available, but they tend to be less expensive than ACA-compliant plans. In this article, we'll explain how these plans work and the healthcare reform process that has led to their creation.


Note that this article is about non-ACA-compliant health coverage that's provided via Farm Bureau programs; some Farm Bureaus help their members enroll in ACA-compliant health plans through their state's exchange, and others partner with a health insurance brokerage that helps members enroll in health plans available in their state.1 But those sort of programs are not what we mean when we talk about coverage that's sponsored by Farm Bureau.

But for people who earn just a little too much to qualify for premium subsidies, ACA-compliant individual market health plans can sometimes be simply unaffordable due to the "subsidy cliff,” although there is a lot of variation that depends on the person's age and location.

Note that contributions to a pre-tax retirement account and/or a health savings account (HSA) can be used to reduce the ACA-specific modified adjusted gross income that's used to determine subsidy eligibility; note also that the Biden/Harris health plan includes a simple way of fixing the subsidy cliff, but it would take Congressional approval to make it happen.


People in this situation are sometimes seeking other alternatives for their health coverage, particularly if they're in fairly good health and not currently using their health coverage extensively. Some turn to short-term health insurance plans, especially in states that allow these plans to renew for up to three years.


Others choose healthcare sharing ministries. Others opt for various combinations of fixed indemnity plans and direct primary care plans. And in several states, Farm Bureau health plans are available as another alternative, although eligibility rules vary from one state to another.


Farm Bureau Plans Exempt From State Law

In several states, Farm Bureau plans are explicitly exempt from state insurance laws, as these states do not consider Farm Bureau plans to be health insurance. This is the case in Tennessee, Iowa, Kansas, and Indiana.


Tennessee's Farm Bureau health plans predate the ACA, but the other three states have passed laws within the last few years that specifically allow Farm Bureau to offer medically underwritten health coverage that's not considered health insurance under state rules.


In all four states, enrollment is available year-round. And anyone can apply, as long as they're members of the Farm Bureau. Membership is just a matter of paying dues; there is no requirement that the person actively be engaged in agriculture in order to join the Farm Bureau or gain coverage under the Farm Bureau health plans available in these four states.


Note that Farm Bureau membership dues do not cover the cost of the health benefits; those are paid separately, in addition to the cost of belonging to the Farm Bureau.


Because these plans use medical underwriting, they can reject applicants due to their medical history, or impose waiting periods before pre-existing conditions are covered. And since these plans are not considered health insurance, they are not required to comply with state or federal health insurance mandates.


So for example, they don't have to cover essential health benefits, and can offer plans with maximum-out-of-pocket limits that are much higher than ACA-compliant plans are allowed to have.

The available plans vary considerably in terms of the benefits they offer. It depends on the state and the specific plan that a person chooses; some are quite comprehensive, while others are more bare-bones.

Because these plans do not have to comply with state and federal insurance mandates, and because they're medically underwritten (and thus can reject applicants based on medical history or impose pre-existing condition waiting periods), they have monthly premiums that are lower than the full-price cost of ACA-compliant coverage for a person who isn't eligible for premium subsidies in the exchange.

This was the driving force behind the creation of these plans, as they can potentially provide a more affordable alternative for healthy people in that situation. But the plans are also controversial, as they are not technically health insurance and can potentially result in the ACA-compliant risk pool having poorer overall health (and thus higher premiums) if healthy people leave the ACA-compliant risk pool in favor of non-insurance options.

Tennessee

For nearly three decades, the Tennessee Farm Bureau's health plans have been exempt from Tennessee's health insurance regulations, as the state does not consider the product they offer to be health insurance.

Comments