On October 1, 2013 many Americans will have the opportunity to purchase health care insurance through federally facilitated or state-operated insurance exchanges under implementation of the Affordable Care Act (ACA). This article aims to provide useful information for farm and other rural residents about this much criticized but mandated Act.
I don’t purport to know all that might be necessary about the ACA for farmers, ranchers and other rural residents. I am relying mostly on what others—more knowledgeable than me—have to say about its implications for rural and agricultural people.
Opinions about the effects of implementing the ACA vary. For example, the Florida Insurance Commissioner, Kevin McCarty, said on July 30 this year that customers in the individual market would see rate increases rise 30-40 percent next year. A just-completed Rand Corporation study says the ACA is unlikely to cause a hike in premiums for the individual market.
Overall costs for healthcare nationally will rise because more people will be covered by insurance but the cost per person will likely decline slightly for many.
The ACA will help rural residents more than urbanites. In a July 29, 2013 report, Keith Mueller Ph.D., Director of the Center for Rural Health Policy Analysis at the University of Iowa, estimated that 10.7 percent of rural residents will qualify for federal subsidies to purchase private insurance, versus 9.6 percent of urban dwellers.
Under the ACA another 9.9 percent of rural residents will qualify for expanded Medicaid coverage, versus 8.5 percent of urban residents. Qualification varies from state to state, depending on the income of the state’s residents and the type of ACA plan elected by the state.
If a state refused to expand Medicaid coverage, rural residents who are too poor to purchase health insurance but do not meet Medicaid income limits will be hurt, not by the ACA, but by state officials who made the decision to opt out of expanded Medicaid coverage.
The ACA will benefit many farmers, says Roger Johnson, former North Dakota agriculture commissioner and president of the National Farmers Union, in an August 21, 2013 article in the Atlanta Journal-Constitution. Currently, most individual farm family insurance premiums are higher than average or their policies may have high deductible amounts and exclusions.
In many farm families one spouse works off the farm for an employer that provides health insurance as a benefit. According to Johnson, uninsured medical costs have often been a major reason for farm bankruptcies.
Under the ACA, farm families will be eligible for group rates and no one can be excluded for preexisting conditions or assessed higher premiums based on health histories. Children can be covered up to age 26 by their parents’ insurance.
The ACA emphasizes preventive services, such as an annual wellness checkup, vaccinations and health screenings, including periodic tests for health problems like cancer. There are incentives for healthcare providers such as hospitals and clinics to keep administrative costs reasonable and penalties for overages.
Planning with a physician for end-of-life care is reimbursed for Medicare recipients under the ACA and is not “a death panel” as has been alleged. The patient, or others granted power of attorney to make healthcare decisions by the patient, can choose life-sustaining care procedures.
Many farm and rural residents will qualify for tax credits under the ACA to help recover a portion of the premiums. The Kaiser Family Foundation recently estimated that 48 percent of people purchasing their own health insurance would be eligible for such tax credits.
An August 2013 report entitled “Making Health Insurance Affordable: Assistance to Individuals and Families in the Affordable Care Act” by Jon Bailey of the Center for Rural Affairs at Lyons, Nebraska, provides a useful explanation of premium tax credits and the probable impact of the ACA on farm and rural residents. This report is available online at: http://files.cfra.org/pdf/ACA-subsidies.pdf.
The amount of the federal income tax credit available to subsidize premium costs will vary according to family income and size.
Much misinformation is circulating about the ACA. Misinformation by some media and elected politicians has created a climate for calculating employers to claim the ACA is causing healthcare insurance costs to rise, so they can require their employees to pay more of their insurance premiums or cut their pay.
Careful examination of these types of claims indicates many of these employers are using false justification to increase their profitability. Many small businesses (those with fewer than 50 employees) will qualify for federal tax credits to help pay for healthcare premiums that are obligated under the ACA.
Additional legislation is needed to further tweak healthcare provisions and costs, such as limits on malpractice awards and cost containment on prescription drugs other than those for Medicare recipients. A single insurance claims processor, somewhat like the Centers for Medicaid/Medicare Services, could be considered to further reduce administrative costs.
Farmers, take a look with your insurer and decide what is most beneficial.
Dr. Rosmann lives near Harlan, Iowa. Contact him at: www.agbehavioralhealth.com.
By Mike Rosmann, Ph.D.