Fort Report: Plowing Back Into Healthcare

May 4, 2018
Fort Report

Michael wrote to me recently.  He asks: "Why hasn't anything been done with HEALTHCARE???”  I find the all-caps method of communicating to be overbearing, but Michael has a pointed point--and the right to say so.

His family of four faces health insurance costs of $2,300 per month, a $13,000 deductible, and no pre-existing conditions.  His income appears too high for help but not high enough to afford this unnecessary and outrageous distortion.  A significant group of Americans fall into this trap.  The government's architecture for healthcare reform, while helping some, has hurt others.  It's causing people to go without and leave themselves unprotected; it's causing families to reorganize their economic lives in order to attach themselves to institutions big enough to provide benefits; it inhibits small business and entrepreneurialism.  This is particularly acute in rural America.  Farmers and ranchers have been hammered by escalating healthcare costs.

Without rehashing the nasty and brutish healthcare debates of the recent past, in an effort to provide more options to this forgotten corner of the discussion, I introduced the Rural Health Insurance Act of 2018, which provides financial assistance to qualified agriculture associations for group health plans.  I am pleased that this legislation has been included in the 2018 Farm Bill that recently passed out of the House Committee on Agriculture.

All over America the lack of access to affordable health insurance is very real.  There are three levels to this crisis.  First, people in the individual insurance market with no access to group plans are paying astronomically higher rates.  Some farm families face the difficult decision of leaving the farm to find work simply for the health benefits.  As we strive to maintain the vibrancy of farm life and rural community, a properly functioning health insurance market—providing reasonable choice and adequate protection—enhances opportunity.  In this time of low commodity prices and export uncertainty, thousands of dollars saved in healthcare costs—perhaps tens of thousands of dollars—goes a long way for the rural family.  

The second part of the crisis are the cost drivers of mandated benefits.  Some mandates make good sense; others pile on costs with marginal effect.  Having a product choice to protect against serious illness or accident, with lower mandates, could substantially reduce cost.

The third level to the crisis involves vulnerable persons, or the sick.  I’m a strong supporter of what is called "government reinsurance."  If a person is seriously ill, he or she should not be denied insurance nor should the risk be carried by smaller insurance pools alone.  The idea is fairly simple: above a certain cost, the government provides a financial backstop to protect the very ill at rates similar to those who are well. 

The Rural Health Insurance Act tackles the first part of the healthcare crisis by creating the conditions for risk-sharing through new forms of group insurance policies, with a subsidy to get them off the ground.  By helping underwrite the cost of agriculture association health plans, the bill engenders large risk pools for rural communities, expanding healthcare options.

The broader healthcare debate has become hampered because of the breakdown of the legislative process, given widespread philosophical and political disagreement.  While the Farm Bill is an unusual place to park this solution, it is an innovative vehicle for a new loan and grant program that jumpstarts healthcare insurance risk pools. I am pleased that the idea is getting national attention and policy traction as a new healthcare solution.

This week in Nebraska the wind blew ferociously.  I still saw farmers in the fields.  Here’s a chance to plow through the headwinds in healthcare.