Survey recommends remedies for farmers' high insurance rates

Friday, September 26, 2008 | 10:24 a.m. CDT; updated 2:39 p.m. CDT, Friday, September 26, 2008

This article has been corrected to clarify Sidney Watson's words on administrative costs and the cost of health care for individual farmers.

COLUMBIA — A recent survey of Missouri farm and ranch operators reported farmers paying higher individual health insurance rates than farmers insured by employer-sponsored plans.

The findings, presented by the Missouri Rural Crisis Center (MRCC) at a press conference at First Christian Church on Thursday, found farmers with individual plans spent $2,117 a year more on health care than farmers with employer-sponsored coverage or coverage offered through another job.

The report states that of the 257 farmers surveyed, one-fifth reported that health care insurance costs contributed to their financial problems. Many farmers have had to delay farm work investments and find second jobs.

Costs could be fixed in a number of ways, the report suggests. The report recommends capping the cost of health care insurance deductibles, assisting individuals and small business owners in payment of premiums, increasing the access to public insurance programs and increasing the opportunities for farmers to benefit from insurance pools that lessen health care insurance costs.

Sidney Watson, an author of the report and research at St. Louis University, said these suggestions are general policy changes the MRCC and Jobs with Justice, a workers' advocacy group, recommend. She said also she thinks these policy changes are reasonable solutions for Missouri farmers.

Watson said the individual market costs one-third more for farmers than for those with employer-sponsored health care. She said insurance companies rate health insurance costs based on the risk of being harmed, and farmers are considered to have a higher risk than the general population.

“In the large group,” Watson said, “the insurance company doesn’t look so closely at the health status of each individual. Large groups have less administrative costs.”

Watson said 25 to 40 percent of health care insurance premium costs for all buyers in Missouri are based on administrative costs. Richard Williams, a cattle farmer from Tipton who attended the press conference, said high health care prices combined with a bad economy mean he and his wife can’t fix up their house the way they want to.

About a year ago, their insurance premium went from $5,000 to $5,600. The original fixing up plan included putting in new carpet and painting the walls. Instead, they’ll just paint the walls, said Kate Williams, Richard’s wife.

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