A crop duster applies chemicals to a field. Credit: Gavin Baker Photography/Shutterstock
Fourteen states are giving farmers a chance to try health plans that serve as a lightly regulated alternative to major medical plans governed by the Affordable Care Act.
The new "farm bureau-type" health plans are specialized association health plans that can be about 30% cheaper than the full individual health premiums for plans available through the states' ACA public exchange programs, according to analysts from the Paragon Health Institute who briefed state insurance regulators on the topic last week in Minneapolis.
States keep ACA major medical rules from applying to the arrangements by excluding the plans from their official health coverage definitions.
"In some states, there is initial underwriting, but once people are enrolled, they are not subject to cancellation, non-renewal, modification or increase in premium due to a medical event," according to a briefing slidedeck posted in a meeting packet posted by the National Association of Insurance Commissioners' Regulatory Framework Task Force. "States often contract with a large, reputable insurer to sell the coverage."
Related: Another ACA tweak, hidden in the farm bill
In Kansas, for example, the plans have an average premium of $383 per month, which can save a family more than $1,000 per month, according to a Paragon analysis.
In Nebraska, farm bureau plans often cost 30% to 50% less than exchange plan coverage, Paragon says.
Paragon representatives have promoted the use of farm bureau plans and arrangements based on short-term health insurance as a more affordable alternative to ACA major medical coverage.
Paragon and many analysts who are popular with Republicans contend that the ACA-alternative plans are cheaper and more flexible than ACA major medical coverage.
Opponents say extensive use of ACA alternatives could reduce patients' access to patient protection laws and destabilize the market for plans that meet ACA major medical standards, by pushing employers with healthy workers to use ACA-alternative plans and leave providers of major medical coverage with the employers with older, sicker workers.
What it means: For small employers and benefits advisors interested in using association health plan coverage, the farm bureau plans provide a demonstration of AHP ideas at work.
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