Nebraska Farm Bureau launches new health plan that is everything but 'insurance'

The Nebraska Farm Bureau launched a new health plan Oct. 1 that offers many of the benefits of health insurance, but only for people who qualify.

The farm and ranch organization that advocates for agricultural issues said the health plan aims to offer savings for its members.

"I think probably one of the top issues facing farm and ranch families in particular is health care cost and high premiums," said Rob Robertson, the chief administrator of the Nebraska Farm Bureau. "It's a disruptor on the family farm and with the family ranch."

The bureau is offering an alternative that aims to offer lower rates of individual insurance to people like self-employed farmers. The plan is different from group plans and individual plans on the Affordable Care Act marketplaces because it uses individual underwriting and does reject some applicants.

The bureau is offering many of the services included in a typical health insurance plan such as office visits, hospitalization, preventative care, emergency room services and maternity care, according to the bureau's website. Mental health and substance abuse care are also covered under the plan.

However, the bureau's plan isn't categorized as insurance thanks to a bill passed by the Nebraska Legislature. Because the plan isn't insurance, it allows for underwriting and is noncompliant with the Affordable Care Act.

Medical underwriting is a process used by companies to determine someone's health status when they are applying for health insurance to determine coverage and price.

The passage of the ACA included a rule preventing insurance companies from doing medical underwriting for qualified health insurance plans, meaning it can't reject people because of certain health issues. The Farm Bureau plan is an exception because it is not technically insurance.

Robertson said underwriting allows the plan to be offered at a lower cost than the unsubsidized premiums of the ACA.

"If you underwrite, a few people won't be able to qualify for (plans), but most do," Robertson said. "But a few of them with a pretty strong health concern would not qualify for these."

People with health concerns could alternatively get insurance from the ACA, Robertson said.

One of the Farm Bureau's plans, the advance choice plan, only offers benefits for preexisting conditions after a waiting period of at least six months or longer, according to the plan's schedule of benefits. Maternity benefits are available for families after a nine-month waiting period. Individual plans don't offer maternity benefits.

In previous years, the Farm Bureau offered health insurance by partnering with Medica Inc. that was compliant with the ACA. When insurance subsidies increased, Robertson said the bureau's association health plan was rendered obsolete by lower federal marketplace prices. The bureau is now partnering with the Farm Bureau Health Plans of Tennessee, which administers plans for six state farm bureaus.

In order for the plan to operate outside of the ACA, the farm bureau lobbied for a bill — LB1313 — in the last legislative session. The bill allowed health plans sponsored by nonprofit agricultural associations.

Eric Dunning, director of the Nebraska Department of Insurance, testified on the bill and said that the plan was not insurance and would not be regulated by the department.

Dunning said it was "too bad" that this bill is necessary and requirements placed on health insurers have made it difficult to offer health insurance at affordable prices without subsidies.

"The subsidies available in the Affordable Care Act marketplace, while generous, do not necessarily work well for people in agriculture due to significant year-to year-variations in income and may not be extended," Dunning said during his testimony.

Enhanced subsidies for health insurance, expanded by the American Rescue Plan Act, expire at the end of 2025, according to the Congressional Budget Office.

Sarah Lueck, vice president for health policy at the Center on Budget and Policy Priorities, has critiqued Farm Bureau health plans in other states. Although the plans have many of the same features as insurance, there are key differences, Lueck said.

"If it's not insurance, it's not insurance," she said.

People using the plan can't submit complaints to the Department of Insurance and the plans aren't subject to regulation, Lueck said.

Lueck said that if the Farm Bureau is able to enroll significant numbers of people who are healthy, through underwriting and marketing to younger people, it would damage the federal insurance market and potentially raise costs.

Robertson said these plans do not impact the federal marketplace and have been in effect in other states.

Kansas implemented a similar Farm Bureau health program. Erin Petersilie, the director of Kansas Farm Bureau Health Plans, said starting a plan is hard.

"For insurance to work, for any type of coverage where we're talking about risk, you've got to have a pretty big pool," Petersilie said.

Unexpected costs for smaller insurance providers could include cancer patients and babies placed in neonatal intensive care units, Petersilie said. The health plans, although they use underwriting, don't just take on fully healthy people, Petersilie said.

"There are some absolute definite cutoffs, but there's a lot of wiggle room that we're able to do with rating and that sort of thing," Petersilie said. "So we would definitely encourage everybody to apply and see where they land, so that they can make good decisions for their families, and that way they can compare it to what they currently have."