Frustrated by rising health insurance premiums, Pat Kreidermacher is among those pleased to see farmers will have another option next year.
A new law allows health insurance co-ops to offer health insurance to members. Kreidermacher — a dairy farmer from Altura — said she and two other families that run the farm have a group insurance plan. They divvy up a monthly $5,000 premium and have continued to see their costs go up each year.
"It's pretty expensive, so we're looking to try and see if we can't cut those costs a little bit and/or increase the benefits," she said.
Minnesota lawmakers concerned about rising health insurance costs passed a bill last session allowing agricultural co-ops to offer "self-insurance" plans — something most large businesses provide to employees. Farm groups, including the Minnesota Farmers Union, lobbied for the change.
The group's lobbyist, Thom Petersen, said farmers often tell him their spouse has to work off the farm so the family can have affordable health insurance.
"If you need to be on the farm, that's when you have to go on the individual market. And that's why we're heard just time and time again how expensive it is to obtain health care and how it takes such a big bite out of people's wallets," Petersen said.
To be eligible to buy the co-op health insurance, the law requires that individuals are actively involved in production agriculture or provide direct services to production agriculture. Individuals are also required to stay in the plans for at least three years.
TWO CO-OPS MOVING AHEAD
So far two co-ops are moving ahead to offer plans. BuyPoint Insurance Solutions, a wholly owned subsidiary of Land O'Lakes, has launched a pilot program in Minnesota this year. The company is offering eight different medical plans to members of 11 co-ops in Minnesota — including All American Co-op in Stewartville. Pam Grove, president of BuyPoint Insurance Solutions, said they expect a total of 12,000 farmers to be eligible to buy the insurance. The goal is to provide farmers with a more affordable health insurance option.
"Our goal was to be on average 20 percent lower than what they could find either direct or on the exchange," Grove said.
Based on how the pilot goes, the hope is to expand the program. If changes are made to allow insurance to be sold across state lines, that would allow the plan to be sold to Land O' Lakes co-op members in other states. So far, Grove said interest has been high.
"Our co-ops have said to me that they are already getting tons of calls from their membership. We're even getting some that want to be new members just because of this plan with certain co-ops," Grove said.
On a recent weekday, a small group of farmers sipped on coffee as they listened to a detailed PowerPoint presentation about the health insurance plan at the Rochester Eagles Club. BuyPoint Insurance Solutions has partnered with Gravie — a company with licensed advisors available to advise farmers on different plan options. That can include plans within the program or other offerings, including those on the state-based exchange MNsure.
Another option for farmers is 40 Square Cooperative Solutions. The group was founded by Cooperative Network — the Minnesota and Wisconsin state trade association for cooperatives — and United Farmers Cooperative, an agricultural supply cooperative based in Winthrop, Minn. Farmers must meet certain criteria to sign up, including having at least one common-law employee on the farm who is issued a W-2. That could include a spouse that does bookkeeping for the farm.
To be eligible, farmers must also buy $100 of voting stock and $1,000 worth of common stock during the first year. There are six health insurance plans being offered. 40 Square's Project Manager Char Vrieze said in order for the co-op insurance plan to move ahead, they need 500 families to sign up. So far, she said the response has been strong.
"Farmers are so happy that there is an additional option out there," she said.
The co-op has already held 17 town hall around the state and has another 11 planned. As of Friday, just under 100 families had signed up for insurance on the plan.
Vrieze added that while the plan can be a great option for some farmers, it's important to know it may not work for everyone. Individuals will need to fill out a questionnaire about their health history. If they have major health problems, they would be faced with paying higher premiums. Minnesota Farmers Union is partnering with 40 Square and purchasing shares in the co-op. The union's insurance agents will also write health policies for farmers through the co-op.
Lynn Blewett, professor of health policy at the University of Minnesota, said it is important to realize that states have very little authority over these self-insured plans. That allows more flexibility in what the plans can offer, but it can also mean potentially less coverage due to less regulation. She said it is important to find out what conditions are covered and whether there are lifetime coverage caps.
So how big of an impact will these new health insurance offerings for farmers have on the individual market in Minnesota?
If the new plans' premiums are considerably less expensive, they could entice more healthy people to leave the state's individual market, Blewett said. More sicker people in the individual market would lead to higher prices. However, if the plans' premiums are not substantially different from those offered in the individual market, the impact could be minimal.
She added, "It could be a disaster for the individual market or it could be another offering that provides some flexibility and good choices for rural areas and good prices."