Robin Carlton pays about $650 a month on the Missouri Health Insurance Exchange for a plan that covers him and his two teenage children.
That monthly total is $200 more than what he paid last year, in part because a pandemic-era premium tax credit expires in December. But the self-employed St. Louis property manager is in no rush to investigate a new type of insurance that could be cheaper than plans on the market: Farm Bureau health plans.
“I don’t like rising costs, but I’m not going to sacrifice my kids’ insurance to save money,” Carlton said.
Carleton noticed that more Americans are facing difficult choices due to the Affordable Care Act’s rising premiums and other affordability issues. For example, a recent KFF poll found that many returning Marketplace participants reported higher costs this year.
Additionally, most people expressed concern not only about the cost of prescription drugs, but also about being able to afford routine and unexpected medical care. People with lower incomes and chronic health conditions were more anxious. Additionally, about 5% of respondents said they had switched to some type of coverage other than the ACA.
Health policy experts say these concerns are giving new legs to alternative forms of insurance, such as Farm Bureau plans.
As of this year, Missouri is one of 14 states that allows health insurance through the state Farm Bureau, a grassroots membership organization that advocates for the agricultural industry and rural interests. Annual membership fees for the agency typically range from $30 to $50, and membership is open to anyone in many states. Membership comes with the option to enroll in a health plan.
Plan details vary by state, but they typically share many of the features of marketplace plans, including broad service coverage, extensive professional networks, and ways to file complaints.
However, many insurance coverages are not provided because states have passed laws exempting Farm Bureau health plans from health insurance requirements. That means its benefits and coverage provisions may be less generous and predictable than the Obamacare plan.
Importantly, the Farm Bureau plan does not have to accommodate everyone who applies for coverage. People have to pass an underwriting test first. During this process, the plan evaluates the applicant’s medical history and health to determine whether to provide coverage. This practice was common before the ACA was passed, and people were often turned away because of pre-existing medical conditions.
Farm Bureau plans can be 30 to 50 percent cheaper than unsubsidized market plans, plan administrators say, because Farm Bureau plans can turn away people with a history of costly chronic illnesses, cancer or other medical problems.
Missouri Farm Bureau Director Garrett Hawkins said that as people struggle to keep their family farms afloat, they could face Obamacare premiums totaling thousands of dollars a month, potentially dissuading some from signing up for coverage.
“We’re trying to present another option,” he said.
Sowing options
According to KFF, average ACA premium payments for subsidized participants who maintain marketplace plans are estimated to increase by 114% in 2026 as the enhanced premium tax credit expires.
Missouri was one of four states last year to pass legislation authorizing Farm Bureau health plans. The others were Alabama, Florida and Ohio State.
Farm Bureau health plans are not new, although the number of states offering them has increased in recent years. Tennessee has offered this insurance since 1947. The Tennessee Farm Bureau Health Plan administers this plan in 10 of the 14 states that allow it.
In Missouri, Farm Bureau offers several plans with varying deductibles, copayments, and annual out-of-pocket limits. Many of the benefits and cost-sharing amounts are similar to coverage available through state health insurance exchanges and employers. These include emergency care and hospitalization, doctor visits, prescription drugs, free preventive care, dental and vision services. Members have access to providers through the UnitedHealthcare Choice Plus national network.
Mr Hawkins said he was pleased with the interest the scheme was generating. According to him, it became possible to apply for insurance through the website from January 1, and as of mid-March, 520 people had applied.
However, it is unclear how many of them will clear the underwriting hurdle and purchase the Farm Bureau plan. Farm Bureau health plans may deny coverage for any reason. Even when coverage is offered, Missouri plans do not cover pre-existing conditions for at least 6 or 12 months. In addition, plans may exclude coverage for benefits related to “known risks” for two to seven years, depending on the issue. As a result, people with a variety of conditions, such as diabetes, high cholesterol, heart disease, or successfully treated cancer, may be denied treatment or have to pay for the associated treatment out-of-pocket for at least a year, and in some cases up to seven years.
“People don’t like us underwriting insurance, but if we did everything the same way as the ACA, we would end up just like the ACA plans,” said Jason Beard, general counsel and chief compliance and privacy officer for Tennessee Farm Bureau Health Plans. “We strive to be an option for people who would otherwise not be able to afford insurance.”
maintain the foundation of reporting
Under Missouri law, once a person is eligible for a Farm Bureau plan, they cannot be fired or charged higher rates if they become ill. Beard said this also applies to the nine other states where Tennessee administers the plan.
“Contractually, we do not have the right to increase premiums or cancel plans based on (individual) health experiences,” he said.
Still, insurance plans can look like insurance products but don’t have the same coverage, so “it can be very confusing for people,” said Anna Howard, director of policy development, access and quality of care at the American Cancer Society’s Cancer Action Network.
Howard said people with a history of cancer are less likely to be approved for a Farm Bureau plan. If accepted, the required services would likely be excluded from coverage, she said.
“Our only concern is that more people are going to enroll in these plans now because so many states are allowing these plans,” Howard said.
As a self-employed property manager, Carlton knows firsthand how underwriting can limit coverage options. Before the Affordable Care Act required anyone to be admitted regardless of health condition, Carlton, who has diabetes, had to get insurance through the state’s high-risk pool, which was often the only option for people with pre-existing conditions.
Meanwhile, policy experts share Howard’s concerns.
Insurers in the ACA markets “have to offer maternity coverage, and if you have a pre-existing condition, they have to pay you benefits from day one. And they can’t charge you more just because you have that condition,” said Sarah Lueck, vice president of health policy at the Center on Budget and Policy Priorities. This would create an uneven playing field for insurance companies and drive up premiums for people who cannot qualify for Farm Bureau plans.
The Farm Bureau “basically plans to use the standard market as a high-risk pool if it wants to,” Lueck said.
Still, it’s easy to see the appeal of Farm Bureau plans, given that many people face significantly higher premiums to receive ACA coverage.
“I’m not saying it’s a good thing for states to abdicate their regulatory responsibilities here,” said Sabrina Corlett, co-director of Georgetown University’s Center on Health Care Reform. “What I’m saying is there are a lot of people out there who are suffering and need health care and can’t afford to pay premiums in the ACA marketplace.”
