Health insurance spike will hit 2026 farm budgets, farmers say

Progressive Farmer's Chris Clayton reported that "Iowa farmers warned Monday that the expiration of enhanced premium tax credits under the Affordable Care Act (ACA) will sharply raise health insurance costs in 2026, forcing painful tradeoffs that could slow farm growth, strain rural hospitals and push some producers out of business altogether."

"Monday was the deadline to enroll in ACA plans for 2026 coverage. The deadline comes as people signing up for plans are seeing premium spikes, and it's expected enrollment will dramatically fall without enhanced premium tax credits," Clayton reported. "Nearly everyone enrolled in ACA marketplace plans will face higher out-of-pocket costs next year as the enhanced credits expire, affecting about 4 million people in rural America and an estimated 24 million Americans nationwide."

AgWeb's Rhonda Brooks reported that "the impending cost surge could affect thousands of U.S. farmers who currently rely on the ACA marketplace for their health insurance, according to the non-partisan KFF (formerly Kaiser Family Foundation), a health policy organization. KFF estimated in 2023 that 27% of 'farmers, ranchers, and other agriculture managers" relied on individual ACA market coverage.'"

"During a livestream event on [Dec. 15], members of the Iowa Farmers Union who rely on marketplace coverage said the refusal to extend the enhanced subsidies will expose families to sudden premium spikes — in some cases exceeding $20,000 a year — without addressing the underlying cost of health care," Clayton reported. "Farmers and other self-employed workers are among the most vulnerable because they lack access to employer-based insurance."

"'This is a gut punch to working families,' said Matt Russell, executive director of the Iowa Farmers Union," according to Clayton's reporting. "'Raising health insurance premiums by thousands — sometimes tens of thousands — of dollars doesn't fix what's broken in health care. It just shifts the cost onto families and small businesses.'"

Farm Bureau Health Plans Seeing More Applications

Clayton reported that "there are some options for farmers to consider outside of ACA policies. Farm Bureaus in at least 13 states offer health plans. Those states include Alabama, Arkansas, Florida, Indiana, Iowa, Kansas, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee, Texas and Wisconsin."

"Most of those Farm Bureau health plans have been launched in the past couple of years. A handful of states are selling plans for the first time this year after getting approval from their state legislatures. In each state, anyone signing up for a Farm Bureau plan also must be a Farm Bureau member," Clayton reported. "With concerns about the status of the ACA subsidies, the Farm Bureau plans are drawing more interest this year."

"'We're getting a lot of activity and calls and interest,' said Rob Robertson, chief administrator for the Nebraska Farm Bureau," according to Clayton's reporting. "'Just with all of the uncertainties and price hikes with the ACA plans … the applications for our product are probably up twofold from last year.'"

"The plans are considered non-ACA compliant because people can be excluded from coverage for certain pre-existing conditions or face waiting periods because of those conditions. The plans also might not cover any out-of-network costs," Clayton reported. "Still, Robertson said most people qualify for coverage and are seeing premiums at roughly half the cost of an unsubsidized ACA plan."

Where do the Tax Credits Stand in Congress?

NPR's Julie Appleby reported that "in Washington, as part of the deal to end the recent government shutdown, a Senate vote was held Dec. 11 on a proposal to extend the subsidies. Another option, which was advanced by Republicans and included funding health savings accounts, or HSAs, was also considered. Neither reached the 60-vote mark necessary for passage."

"On the House side, Speaker Mike Johnson plans this week to bring to the floor a narrow legislative package designed to 'tackle the real drivers of health care costs.' It would include expanded access to association health plans and appropriations for cost-sharing reduction payments to stabilize the individual market and lower premiums. It would also increase transparency requirements for pharmacy benefit managers," Appleby reported. "Like the bill put forward by Republicans in the Senate, it would not extend the ACA enhanced subsidies. Lawmakers are likely to vote on such an extension at some point, but it is not clear when."

"In general, Democrats want to extend the life of the more generous subsidies, created in response to the COVID pandemic," Appleby reported. "Those are set to expire at the end of the year. Republicans are split, with many balking at the cost of a straightforward extension, as well as the policy and political implications that might come with a vote to buttress the ACA, which many have long viewed as public enemy No. 1."

(Source: University of Illinois Farm Policy News)