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A bill to allow the Alabama Farmer’s Federation to offer its health plan to its members was filed at the beginning of this legislative session. This legislation was briefly and hotly debated in the last session before dying in committee.
SB84, filed by Sen. Arthur Orr, R-Decatur, would allow a nonprofit agricultural organization to offer its members and their families health benefits. Alabama currently does not allow any entity that isn’t an insurer or in the insurance business to provide health benefits.
The bill is designed for a small percentage of Alabamians. Farmers in Alabama often make too much money while self-employed to qualify for subsidies under the Affordable Care Act.
As a result, farmers may be working below their capacity to stay within the federal subsidy range or going without health insurance. Sometimes spouses leave work on the farm to find a position with insurance for their families.
As a result of the economic struggles that Alabama farmers are facing, the USDA Census of Agriculture reported that between 2017 to 2022, Alabama lost 8 percent of its farms.
Alfa recognizes that this is a narrow group that would benefit from their health plans. Jeff Helms, Alfa’s director of communications, said that within the five years it would take for this program to reach maturity, they would optimally be serving 10,000 of their members.
“We’re not talking about a huge piece of the health coverage market in Alabama. We’re not looking to get into the underwriting of health insurance in a big way, we’re looking to serve our members,” said Helms.
Critics of the bill say that the wording of the legislation, and the fact that it isn’t marketed as health insurance, could create more issues for the people it sets out to serve.
Ted Hosp, Vice President of governmental affairs at Blue Cross Blue Shield of Alabama, said that without having it spelled out within the legislation, Alfa could “cherry-pick” who they want to cover, framing it as coverage for young, healthy people.
“One of the things that every real health insurance is prohibited from doing is discriminating against people based on a pre-existing condition,” said Hosp. “The plan only works and the only way they can save their customers money is to deny people with pre-existing conditions or charge them more.”
The contracts are “evergreen” as long as people pay their premiums, Helms said.
“Once you enroll and once you’re accepted, you can never be canceled and your rates can’t be increased for an individual health change,” said Helms.
“Let’s just say I enroll in the program, and next week, I’m diagnosed with something long-term. I can never be canceled as long as I continue to pay the cost of the coverage and my membership dues. I think that provides a pretty robust assurance to a member that buys this.”
The proposal is based on a model from the Farm Bureau option in Tennessee that’s been replicated in 10 other states. These plans also cover the health benefits provided under the ACA.
“The fact that farmers, because they’re self-employed, need help with their health insurance is not a new thing. We started helping our members with health insurance in 1968, and this is just the latest tool to try to do that, so we’re just seeking from the legislation the authorization to do that,” said Helms.
Alabama lawmakers received a joint letter last week from 30 organizations, asking them to reject the bill once again.
“We support innovative efforts to improve health coverage affordability and access, but not if these efforts compromise patients’ ability to receive the care they need. We ask you to partner with us to champion policies that strengthen access to comprehensive, affordable healthcare for all Alabamians,” the letter reads.
SB84 will be taken up in the Senate Banking and Insurance Committee for consideration.
