Alfa health plan debate brews again in State House

MONTGOMERY — The Alabama Farmers Federation is again asking state lawmakers to allow it to sell its own health coverage to members, saying more affordable plans will save struggling farm families thousands of dollars a year in premiums and potentially increase their productivity.

Opponents of Senate Bill 84 say it will allow Alfa to skirt the rules and regulations insurers must follow, like who and what must be covered, and allow the association to cherry pick healthy customers.

This debate arose briefly in the 2024 session, pitting some of the largest lobbying organizations in Montgomery against each other.

Preston Roberts, Alfa's director of Agricultural Legislation, said too many Alabama farmers are in a "middle-class donut hole," working for themselves and not having employer-provided insurance plans and making too much money to qualify for subsidies offered under the Affordable Care Act. A family of four making more than about $125,000 doesn't qualify for the tax credit.

"What we're hearing from our members is that some of them are paying upwards of $2,500 a month for health premiums," Roberts told Alabama Daily News.

To cover the cost, farm families may forgo purchasing a new piece of equipment or hiring new employees, limiting their growth. Some opt to go without insurance, and in some families, one spouse may opt to work off the farm for the sole purpose of obtaining insurance.

Meanwhile, Alabama farmers are operating in an unstable economy with increased production expenses. Last year, they lost more than a combined $1 billion in income, Roberts said.

The legislation doesn't mention Alfa by name but would allow a "nonprofit agriculture organization" based in Alabama and in existence before 1940 to offer its members health benefits "deemed by the nonprofit agricultural organization to be important in assisting its members to live long and productive lives."

The proposal is based on a decades-old Farm Bureau option in Tennessee that's been duplicated in about 10 other states. A similar bill is pending in the Ohio Legislature right now.

In its promotional materials, Alfa isn't advertising these health plans as "insurance," and that's the heart of the problem, opponents say.

"We strongly oppose Alfa's proposed Farm Bureau Health Plans primarily because they would be allowed to reject people with pre-existing conditions and cancel people's insurance when they get sick and cost too much," Blue Cross and Blue Shield of Alabama spokesman Sophie Martin told ADN.

"That would be allowed for Alfa — and only for Alfa — because they would not have to adhere to federal or state laws that other legitimate health insurance carriers in the state are required to follow. These rules, like covering pre-existing conditions, are put in place to protect consumers. Exempting themselves from these regulations puts Alabamians at a higher risk of their claims not being paid or not getting coverage at all."

Plans like what Alfa proposes are also not required to cover routine examinations, prescription drugs and preventive health screenings such as mammograms or colonoscopies, Martin said.

Roberts said in Tennessee, about 85% of applicants are accepted.

"While there would be some pre-screening involved in order to make the product more affordable for those that we're able to serve, the moment that you're accepted into the program — and this is how it's worked in other states — you're covered."

The contracts are "evergreen" and valid as long as people pay their premiums, Roberts said.

But that's not in the bill, Martin points out.

"Since Alfa is promising they are not going to cancel people when they get sick, it's confusing why they won't put that in the legislation," she said. "Because they won't, we have to assume they want to keep the option to cancel people who get sick and cost 'too much.'"

The Alfa proposal is geared toward a narrow group of individuals — farmers, small business owners and independent contractors. While anyone can become an Alfa member if they pay the dues, Roberts said these plans won't be appealing to most people.

He estimates 10,000 people covered after five years of the program in Alabama.

"A very narrow group of people would be attracted to this," Roberts said.

In Tennessee, the Farm Bureau plans cover about 138,000 lives, less than 2% of the population, Roberts said.

In a joint letter last week, 30 organizations, including the American Cancer Society Cancer Action Network and the American Heart Association, asked lawmakers to reject the proposal.

"This lack of comprehensive coverage not only undermines the health of Alabamians but could shift costs to the broader health care system as patients are forced to delay or forgo necessary care," the letter said. "These plans are a step backward, returning us to a time when insurers could discriminate against the sick and deny coverage to those who need it most."

Doing something different is the point, bill sponsor Sen. Arthur Orr, R-Decatur, told ADN.

"We have the highest cost health care in the developed world but are among the lowest in outputs," Orr said. "It's past time to tear down the silos of protectionism.

"Other states are taking on these issues while Alabama remains behind. The legislation would merely allow freedom of contract between an organization and its members for health care coverage. The Farm Bureau-type plan has been vetted in 10 other states. Tennessee has been doing it successfully for decades. It's time we offer the people of Alabama more choice in this area of health care coverage."

The bill is assigned to the Senate Banking and Insurance Committee. Committee Chairman Sen. Shay Shelnutt, R-Trussville, said Friday he didn't yet know when it will be on the body's agenda.

"While the Alabama Legislature can't control fuel prices or fertilizer prices or the cost of labor, this is one area where the Alabama Legislature can help the Alabama farmer," Roberts said.