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Proposed legislation would enable the Wisconsin Farm Bureau Federation to provide health care coverage to members outside traditional insurance regulations. Supporters say the measure fills a gap in options for a demographic of people who would otherwise go without coverage, while critics maintain it sells patients working in a high-risk profession an inferior health product that lacks federal protections.
Here’s what you need to know:
The bills: The Republican-backed AB 860 and its companion, SB 811, would enable nonprofit agricultural organizations to provide health care coverage to members. The plans are not considered insurance but provide analogous benefits. Unlike traditional insurance, however, the issuer may use a patient’s health history to determine whether it will provide coverage and how much — a strategy intended to lower enrollees’ costs.
To offer health benefits, the agricultural organization must have been founded prior to 1922, about two years after the Wisconsin Farm Bureau Federation was established. Critics say this stipulation provides the state’s largest general ag organization near-exclusive access to this niche health care market, excluding other agricultural associations and co-ops.
Some context: The bill’s co-sponsorship memo notes farmers often struggle to obtain traditional insurance or lack a spouse whose employer provides it, leading some to seek off-farm employment. Those whose incomes exceed limits to qualify for subsidies may also find Health Insurance Marketplace plans to be unaffordable, said Jason Mugnaini, a Wisconsin Farm Bureau lobbyist.
Federal law requires health insurers to sell plans to all consumers regardless of health status and prohibits issuers from excluding or limiting coverage for preexisting conditions. But those standards depend on whether the coverage being offered is defined as insurance under state law.
By carving out a Farm Bureau exemption, the organization could use a person’s health status to determine whether to offer coverage, the prices it will charge and what exclusions or limits to impose. Wisconsin applicants would be required to provide a medical history.
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Yea: Other state Farm Bureaus, particularly the Tennessee chapter, offer the same type of health coverage proposed in Wisconsin, and according to the bill’s supporters, nine out of 10 applicants receive coverage at rates 30% to 60% less expensive than unsubsidized insurance sold on the Health Insurance Marketplace.
Backers say the bill responds to exclusion concerns by setting a six-month limit on delaying coverage of a preexisting condition — and for good reason, according to Mugnaini — so as to prevent people from enrolling before an expensive procedure and subsequently dropping out after receiving it.
Excluding other agricultural organizations from offering coverage would prevent fly-by-night plans from flooding the marketplace, he said.
Several agricultural groups support the bill, including the Wisconsin Cattlemen’s Association, Wisconsin State Cranberry Growers Association and Wisconsin Veterinary Medical Association.
“If it’s something people aren’t gonna be happy with, they’re just not gonna sign up,” said bill sponsor Rep. Tony Kurtz, R-Wonewoc.
Nay: Julie Keown-Bomar, Wisconsin Farmers Union executive director, warns that the proposed legislation could increase public insurance premiums for all Wisconsinites by removing younger or healthy people from the insurance pool.
Although the Wisconsin Farmers Union, which advocates for universal health care, does not want to offer its members health coverage, the bill excludes it from doing so, as the organization was founded in 1930.
The proposed legislation so alarmed members, they recently passed a resolution at their annual conference to reject the introduction of “healthcare products that are designed as if they were insurance products, which operate outside of a regulated insurer.”
Why watch? The bill taps into a larger debate over products exempt from Affordable Care Act protections. Several organizations, like the American Heart Association, United Way and NAMI, warn these plans could be risky for consumers, especially those with pre-existing conditions, and inflate insurance premiums for those who use the Affordable Care Act marketplaces. The Wisconsin Office of the Commissioner of Insurance echoed those concerns in its opposition to the bill.
Kurtz expects just a few thousand to seek coverage in Wisconsin, including many who lacked insurance in the first place. He doubts the relatively small number would affect rates across the market.
What’s next? The Assembly Committee on Insurance held a hearing on the bill Jan. 11, and the Senate Committee on Insurance and Small Business held a hearing this past Thursday. Committee votes have yet to be scheduled.
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