Critics of the Kansas Farm Bureau’s proposal for an unregulated cheap alternative to health insurance worry about the scope of coverage that will be offered and fear the option will drive up costs for those with traditional plans.
KFB says the idea is to serve those left behind by the Affordable Care Act, such as self-employed residents of rural areas who can’t afford marketplace premiums.
The Senate Financial Institutions and Insurance Committee has approved Senate Bill 32, which would allow KFB to provide health care coverage that isn’t subject to oversight by the Insurance Commission or ACA.
Lawmakers heard from family farmers like Sarah Schmidt, of Junction City. She said her family’s monthly premiums increased from $525 per month before the ACA to $984 per month with a plan on the federal exchange.
“We came back to the family farm to raise our children, because of the lifestyle, work ethic expectations and the values it instills,” Schmidt said. “We did so knowing that choosing to be self-employed might mean that we sacrificed in other areas. One of these which has become a huge hurdle with each passing year is family health care.”
KFB sees an opportunity to provide affordable coverage by sidestepping regulations that require insurance companies to cover pre-existing conditions and certain types of services.
Sen. Rob Olson, R-Olathe, chairman of the insurance committee, said he wasn’t concerned by the potential limitations of the KFB plan.
“We’re going to drive people away from Kansas, especially in rural areas,” Olson said. “The Farm Bureau plan gives people an option that is more cost effective for families and individuals. I think the more people you can get insured, the more they’ll be using the rural hospitals and local hospitals.”
The proposal set off alarms for insurance companies, who see it as unfair competition, and advocacy groups, who worry about patients who could be cast aside when diagnosed with cancer or other diseases.
Brad Smoot, legislative counsel for Blue Cross and Blue Shield of Kansas, said KFB could cherry pick healthy applicants and reject others.
KFB would have no obligation to cover things like chiropractors, optometrists, psychologists, immunizations, mental health, reconstructive breast surgery, drug and alcohol treatment, maternity stays or telemedicine, Smoot said. Those who are denied coverage wouldn’t be able to appeal to the insurance commissioner.
Blue Cross “knows full well that health insurance costs in the individual market are high and rising,” Smoot said. “Unfortunately, SB 32 doesn’t magically make those costs disappear. It only shifts the health care costs of the less healthy to other insurers.”
Jordan Feuerborn, of the American Cancer Society Action Network, said the proposal could segment the insurance market, drive up premiums and make it more difficult for cancer patients and survivors to find health insurance.
“The sad reality is that too much cancer death and suffering is attributable to gaps in our health care system,” Feuerborn said.
Terry Holdren, CEO and general counsel for Kansas Farm Bureau, said KFB plans will “look traditional” and cover traditional needs, such as hospital care, prescriptions and maternity services.
The problem, said Sen. Barbara Bollier, D-Mission Hills, is there are no guarantees. She said people will get a false sense of security with the coverage, which could exclude things like birth control.
“It could be anything,” she said, “and it very likely will include significant increases in rates to people who ultimately have a significant diagnosis — such as cancer or diabetes or have a heart attack or have a stroke, and on down the line. And while Farm Bureau says, ‘We won’t drop them,’ they have limitless what they can charge for those people.”
She also said the coverage is discriminatory against women.
“They were very clear that men shouldn’t have to pay for women to have children, the pregnancy-related costs,” Bollier said. “And my comment was I really thought a man and a woman were involved in this together, this creation of a child. And I find it fascinating to say, ‘Well, since I’m a single white male, I shouldn’t have to pay for women having babies.’ Well, we as a collective society recognize that we’re all part of that, whether we actually have children or not. We never discriminate in that way.”
Holdren said KFB doesn’t intend to gender rate plans. A woman’s pregnancy would be considered a pre-existing condition, he said, but whether or not someone is potentially pregnant won’t be a factor.
KFB would offer contracts specific to the needs of an individual or family. Because a young man “is unlikely to become pregnant,” Holdren said, “that coverage may not be included.”
“It’s not designed or intended to be anti-any particular gender or other things,” Holdren said. “As a membership organization, Kansas Farm Bureau is attempting to do this in a way that serves the needs of our membership, which is fairly broad and diverse. We’ve got to meet those needs with whatever we offer.”
He said the goal is to provide coverage to uninsured people who earn too much to qualify for Medicaid, even if it were expanded. He said the organization expects 42,000 people to sign up.
In Iowa, the Farm Bureau announced last month it was extending its health care offerings to people who are eligible for employer plans but want a more affordable option. The organization said in one family’s case it was able to reduce the cost of coverage for a man from $1,350 per month to $626 per month. His wife didn’t qualify.
“It’s not the gold plan,” Olson said, “but I think they definitely cover a large number of different items. Farm Bureau has been in business a long time. I think they’re a good company. They’ll create a lot of competition in the marketplace.”
Lawmakers also are considering legislation that would expand the duration of short-term coverage plans and relax the rules for association health plans.
Dana Bacon, regional director of government affairs for Leukemia and Lymphoma Society, said he supports innovative efforts to improve affordability and access to health insurance, but not if the efforts compromise the ability of cancer patients to find, receive and sustain the care they need.
“A short-term health plan is a lot like a donut tire,” he said. “It’s great to get you to the shop and get your car fixed and get the right tire and get back on the road, but if you try to drive 2,000 miles on it, you’re risking a lot of trouble.”
This article was originally published on The Topeka Capital-Journal website, here.
Paid for by The Senate Democrats Committee, Kerry Gooch, Treasurer.