By Alexis Shanes
Medill Reports

Illinois farmers, faced with exploding health care costs, are turning away from the individual health insurance market as they seek solutions to one of several ballooning financial woes.

Association healthcare plans could provide an answer, said Christina Nourie, an Illinois Farm Bureau legislative coordinator.

Association plans allow small businesses or organizations to join together to purchase health insurance on behalf of their members just as a large employer would, she said during a talk Saturday at the IFB Annual Meeting in Chicago. But legislation would be needed to authorize such plans in Illinois and other states.

Farm bureaus are a textbook example, as they join numerous small enterprises — farms — that often are pressed for cash and have limited access to health care resources.

The Affordable Care Act, better known as Obamacare, mandated that association plans cover 10 essential health benefits, including emergency services, hospitalization, mental health services and prescription drugs, much like the requirements for normal small business or individual plans.

But in his quest to undercut Obamacare, President Donald Trump in June signed an executive order lessening regulations for association plans, Vox reported. The action made association plans available to self-employed individuals such as farmers, not just small businesses. This is now a more feasible option for organizations such as the IFB.

However, after the executive order, association plans are no longer required to provide the 10 essential benefits, resulting in insurance plans that can be cheaper but limited in scope, and that often may not provide adequate coverage for older, sicker people.

Despite their limitations, as farmers increasingly struggle to find affordable health care, an association health care approach could work for the IFB, although the group still is early research stages of assessing plans, said Chris Magnuson, the IFB’s executive director of operations, news and communications.

The IFB is pursuing a policy similar to a Nebraska Farm Bureau association plan “because they are actually working under the administration’s new rules” and are still ACA compliant, Magnuson said.

“They’re estimating it could reduce the cost by 10 or 15 percent from what members may be able to get on the individual market,” Magnuson said of the Nebraska plan. “I’m not wanting to oversell its benefits, but it is something that could provide some savings.”

For IFB’s constituents, any plan that might offer relief is worth exploring.

Shelby Hoerner is a farmer in Livingston County with pre-existing health conditions. His wife, who has worked the same full-time job for 30 years, receives some health insurance reimbursement but no formal plan. The resulting toll on their finances to maintain full health insurance coverage even with ACA is crippling.

“Our payments are $25,000 a year,” said Shelby Hoerner, adding that he even had to find a new doctor to accept his current plan. “And we have huge deductibles.

“Obamacare — when it came in, it was fine,” he added. “Since then, it’s just skyrocketed.”

Hoerner, in his early 60s, plans to transition to Medicaid soon. But he said many of his colleagues in agriculture don’t have the means to provide health care for themselves and their families, even with  ACA.

A survey ahead of the annual meeting revealed that affordable health care is a priority for most IFB members, Magnuson said. Of the nearly 2,500 respondents, 47 percent said they do not have access to employer-based coverage, and 61 percent were interested in health insurance through an association health plan.

“It’s very much on the minds of members,” Magnuson said. “Almost half our members are in need of health insurance options.”

But state-level politics would make passing an AHP law in Illinois difficult, Nourie said. The 2018 midterm elections brought Democratic majorities in the Illinois House and Senate, along with a Democratic governor-elect, J.B. Pritzker, tinting the state blue. Illinois has not yet taken action for or against association plans, she added.

“Democratic-leaning states are looking at ways to make it more restrictive,” Nourie said. “Republican-leaning states are looking at ways to make it easier to set up” an association plan.

Those party divisions stem from threats to the existing individual and small business marketplaces involving association health care plans. The plans tend to draw younger, healthier people, potentially destabilizing the individual market, which Nourie cited as the reason why a left-leaning state might reject association plan legislation. Those who didn’t transition to the association plan surely would face raised premiums.

But Shelby Hoerner’s daughter, Sarah Hoerner, said she wonders if an association plan would benefit anyone other than the younger crowd — an important question for a population comprised increasingly of individuals in their late 50s, according to the U.S. Census, who engage in a relatively hazardous occupation.

“Is it really an option for someone like my dad, who’s got pre-existing conditions and is in his 60s?” she said. “Or is it just going to be young and healthy people?

“States are saying ‘no,’ but why?” she added. “Politicians are politicians, but usually, if somebody is up in arms about something, there’s a reason.”

Sarah Hoerner, an agricultural lender with a bank, said health care is the fastest growing living cost for farm families. Data from the Illinois Farm Business Farm Management program, a University of Illinois service, shows medical costs for farmers have increased more than $3,600 in the past decade.

“The biggest thing I hear from my customers, these more experienced farmers, is, ‘How am I going to pay for this?’” Sarah Hoerner said. “They tell the young farmers, ‘You or your wife have to have an off-farm job because someone has to have health insurance.’

“The cost if you don’t have health insurance and you have a catastrophic event is just — you can bankrupt your farm,” she added.

For Shelby Hoerner and his wife, a “right” answer doesn’t exist.

“We’re in the group of people that insurers can charge because we have no other options,” he said. “We’re caught in a vacuum.”