Farmers Go it Alone on Health Care, Pay More

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(Sacramento, CA)
Friday, October 24, 2008

Meet Paula Floriano.

“Fixing this, fixing that, doing this doing that…”

She’s a busy 43-year-old dairy farmer in the Central Valley town of Atwater. Her blonde hair firmly clipped up with a cigarette dangling from her mouth, Floriano is raking hay near the calves’ pen. Her son scoops up the piles with the family tractor. It’s about nine in the morning, the cows have been milked and Floriano is making sure everything’s in order. 
“I’m the clean up crew and then when the milker’s off I feed the heifers, the dry cows and all the smaller ones and then I give milk to the young ones.

Floriano has two teenage kids and runs the modest farm with her husband, Paul. They work seven days a week starting at the crack of dawn tending to their 125 cows. Floriano says she definitely gets aches and pains from all the manual labor. Right now, she pays about a $1,000 a month for her families’ health insurance, which doesn’t include dental or vision coverage. Even with this insurance she says they avoid going to the doctor.   

“About a year and a half ago my husband got stung by some bees that were out here and he had an allergic reaction to them so we went over here to the clinic and that bill was $1,900 after the insurance picked up and he got a shot for the reaction and that was basically it so, you know, we try not to go unless we really, we really have to.”
On top of the monthly premium Floriano says they have a $10,000 deductible for medical care. That’s because they’re small business owners and buy their health insurance as individuals. Floriano says health care costs eat up a lot of their income.

“Hay prices and grain prices are really hitting us hard and our creamery is, at least here, is having financial difficulties so the premium is automatically taken out so I better make sure I have it there and that means other bills wait.” 

A recent survey by the non-profit Access Project shows this is not uncommon for farmers – in fact they pay twice as much for health care than non-farmers.

For the most part paying more for insurance and getting less is the nature of the individual market. President of the National Association of Health Underwriters Scott Leavitt says there’s a reason it’s so expensive. First of all he says it’s a small pool of people and that makes it harder for the insurer to spread out risk. And…

"When you work with an employer the employer is paying the lions share of the premium, typically 50 percent plus when you do buy individual policy there’s nobody else paying any other share of the premium you do pay the entire cost.” 

Regardless of why it’s so expensive a professor at the Health Policy Institute at Georgetown University, Karen Pollitz, says the bottom line is the individual market is a mess.

“Nobody would design a system for financing health care like the individual market that we have today, it’s volatile, it’s unstable, it’s expensive, it’s dangerous and people can really get hurt.” 
Pollitz says most people don’t realize that when you enter the individual market, there’s little regulation. And, she says, since almost all farmers are small business owners they’re at risk of paying higher premiums if they have a pre-existing condition, like cancer or diabetes. 
“So your protections in this market are much less, compared to group plans where federal law says it’s just not allowed to discriminate against people based on your health status. In this market you always get discriminated against based on your health status.”
Matteis: “It’s disconcerting that’s for sure, and we’d certainly like to find ways for them not to do that.”

That’s Rich Matteis with the California Farm Bureau Federation – an advocacy group for farmers. He says about a third of the organization’s 90,000 members buy health insurance policies the Bureau has negotiated. And, he says they’re working on offering more health insurance plans. But at a time when the cost of health care is a major national issue, Matteis says he’s not hearing a lot about it from farmers.

“Maybe it is part of being part of that hearty stock, that rural, independent stock, that you know they do want the basic health care if they have an emergency but they’ll doctor things and tough it out.”  
Back at the dairy farm Paula Floriano says she and her family have “toughed out” injuries and not gone to the doctor.  But in the end, she says it’s all worth it – it’s much better than a nine-to-five desk job.   

“You’re working and yeah you can say well I got insurance and I get my two days off but from the people I talk to that doesn’t make them very happy. I mean yeah it’s rough and it’s hard but we smile around here…you know we can laugh.” 

Floriano still believes Congress should step in to make health insurance affordable for small business owners.California has passed some legislation to regulate the individual market. And farmers and policy experts alike are waiting to see what the new president will do. But, for now, farmers will continue to pay high prices for mediocre health care.