The Missouri Farm Bureau would be allowed to sell health insurance plans that skirt certain federal regulations under legislation critics worry could leave consumers without proper protections or adequate coverage.

The bill, which has already cleared the Missouri House and is awaiting a committee hearing in the Senate, allows health plans that don’t follow the rules set by the Affordable Care Act, also referred to as Obamacare.

The Farm Bureau would be permitted to deny people coverage due to pre-existing medical conditions, for example, or offer benefits that are more limited than what is allowed under federal law.

Those practices would allow also allow the organization to sell less-expensive plans. Many farmers and other members of the Farm Bureau, proponents say, are uninsured because they can’t afford to buy a federally-subsidized plan on the Affordable Care Act marketplace or make too much money to qualify.

“What we’re really trying to do here is get coverage options to these young farmers, potentially ranchers and members of this organization to better have care for their family and their loved ones,” state Rep. Kurtis Gregory, a Republican from Marshall and the bill’s sponsor, said in a committee hearing in January.

The Missouri Farm Bureau is a nonprofit agricultural membership organization which partners with for-profit companies to sell various kinds of insurance to its members. Anyone can join, though historically the group has been primarily made up of people in farming communities.

“This is about allowing people to make choices for themselves,” state Rep. Dean Van Schoiack, a Republican from Andrew, said during House debate on the bill in March.

Missouri would join six other states that have passed similar carve outs for Farm Bureau insurance plans: Tennessee, Iowa, Indiana, Kansas, Texas and South Dakota. Several other state legislatures are considering similar legislation this year.

The idea has faced opposition from some House Democrats, patient advocacy groups and other insurance companies who have raised concerns about inadequate consumer protections and coverage, as well as disrupting the market.

“I don’t want people to sign up for something that is unregulated health insurance and then fall through the cracks even further,” said state Rep. Emily Weber, a Democrat of Kansas City, during the House debate.

Emily Kalmer, a lobbyist for the American Cancer Society Cancer Action Network, raised concern in a January committee hearing that Missourians could be “left without coverage, face large costs or denied coverage,” and lack any of the consumer protections in the law. 

The Farm Bureau would revert to the pre-Obamacare practice of what’s called medical underwriting, carefully evaluating applicants’ medical history and risk, to determine whether to cover them and at what price.

“While we don’t have experience in Missouri with Farm Bureau plans, we do have experience in Missouri with medical underwriting,” Kalmer said. “And that was horrible for cancer patients in the past…those practices used to be allowed in the state of Missouri and they were horrible for cancer patients. So it’s not a ‘what if’? It’s a ‘what would be legally allowed here’?” 

Coverage concerns

The Farm Bureau has argued that its members hold the organization accountable, even absent regulations, and that its enrollees in states with the program report high levels of satisfaction.

Benjamin Sanders, a lobbyist from Farm Bureau Health Plans of Tennessee, testified in committee in January that the organization’s acceptance rate for applicants is 90%.

Tennessee enacted a version of the law exempting the Farm Bureau from regulation in 1993.

“There are conditions that will cause someone to be denied coverage…The best way to look at it is if someone has an ongoing catastrophic health condition, they will likely be the non-covered,” Sanders said. 

The organization uses a six month waiting period, upon enrollment, before those with certain conditions can use the benefits. It’s a “safeguard,” Sanders said, to ensure people don’t sign on for an expensive surgery then drop the plan, for instance.

Some of the Farm Bureau plans offer the 10 essential benefits the ACA requires and some do not. Sanders said 75% of members select a plan that does include all of those benefits.

Asked about whether pregnancy could be considered a pre-existing condition resulting in that six-month waiting period or denial, Sanders said it depends on the plan.

“Generally speaking, pregnancy would be considered a pre-existing condition…it depends on when they join and the length of the pregnancy,” he said, adding that someone trying to join at eight months pregnant wouldn’t be eligible but a few days pregnant, would likely be. Individual plans don’t cover maternity care but the family plans do.

State Rep. Danny Busick, a Republican of Sullivan, said opponents of the legislation were presenting a lot of “what-ifs.”

The Farm Bureau in other states doesn’t need to abide by data transparency requirements of regulated insurance companies. But the organization says internal numbers show a high retention rate.

“Why is there a 98% retention rate in the states where they have this? If they weren’t covering these things, people would be getting out of the system right and left,” Busick said.

“Just because they’re not required by law doesn’t mean they won’t do it,” Busick said. “And I think that premise is what I have a problem with.”

The plans wouldn’t be overseen by the state’s insurance department: Proponents have said because it’s a contract, those with grievances could go to court. Opponents argued that is not a viable option for many.

“The current system, it’s a regulated product,” said Kalmer, the American Cancer Society lobbyist, “you have appellate rights with the Department of Insurance, you can call their consumer protection hotline and go through the processes and they’ll help mediate the issues.”

There are still issues with the regulated market, Kalmer said, “but at least there is a process by which you can make sure that anything that the legislature here has required them to do, that they’re legally doing it.” 

State Rep. Brad Pollitt, a Sedalia Republican, said the Farm Bureau “answers to their membership,” adding that if they started dropping people from their plans, for instance, “I believe their membership would hold them accountable for doing the right thing, because that’s how those folks have been raised.” 

Market dynamics

Other insurance companies oppose the legislation for allowing just one group to be exempt from federal rules, which they say gives the Farm Bureau an advantage over competitors.

Michael Henderson, lobbyist for the Missouri Insurance Coalition, called the proposal “unequal treatment in the marketplace.”

Henderson said insurers abide by pages of state health mandates.

“I have heard testimony that some of that coverage may be included in the plans,” Henderson said. “And Rep. Busick, I know you mentioned we’re talking a lot about what ifs. We’re also talking a lot about ‘trust us.’”

The Farm Bureau plans would be designed to help those who aren’t eligible for or can’t afford Affordable Care Act subsidies. 

Tim McBride, a health policy analyst and professor at Washington University in St. Louis, said his concern would be that the Farm Bureau plans would attract healthier people and have a more limited benefit package.

“The purpose of the ACA was to make sure that there wasn’t cherry picking going on by the insurance companies,” McBride said, meaning some companies siphoning off healthy people and driving up the cost of coverage for others.

He said research shows people get “enticed by the low premium number,” but don’t always study the fine print, which is one reason the ACA has rules about what needs to be covered. 

“I can certainly understand why people want to go to get low premium plans, especially farmers or their spouses or their children,” he said. “But that’s part of what the purpose of the subsidies are in the Affordable Care Act is to try to make the plans affordable.”

The federal government expanded subsidy eligibility in the Affordable Care Act marketplace through next year.

In Tennessee, Stat News reported in 2017, some experts say the effect of pulling healthy people onto Farm Bureau plans has been that participants in the Affordable Care Act marketplace are sicker than in other states, which can cause market issues such as companies being less willing to participate and sell plans. The Farm Bureau has denied having any such effect.

Gregory estimated around 11,475 Missouri Farm Bureau members lack health insurance, and said they would be the target audience for enrolling in the Farm Bureau plans. Others could sign on, too, including members who are currently insured but switch over to the Farm Bureau plans, or people who join the Farm Bureau in order to access the insurance. 

Sanders, with Farm Bureau Health Plans of Tennessee, said the volume wouldn’t be enough to make a difference in the market. 

“But to the members that use these plans,” he said, “it makes a difference.”