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Alfa asks to offer health plans to members; opponents say it’s not regulated insurance

A bill to allow the Alabama Farmers Federation to offer its own health plan to its members was debated for about an hour in the Senate Insurance Committee on Wednesday.

Proponents said it would give farm families a cheaper option for health care and help them stay in business.

Opponents said the health plan would let Alfa skirt rules insurance providers have to follow and cherry-pick healthy people to cover.

Sen. Arthur Orr, R-Decatur filed Senate Bill 232 on Tuesday. In committee Wednesday, he said the bill would allow coverage for self-employed families who make too much to qualify for an Affordable Care Act health care subsidy, but can’t comfortably afford private insurance. Some of them now go without, he said. 

Senate Bill 232 doesn’t mention Alfa specifically, but a “nonprofit agriculture organization.” It also specifies the non-profit could offer a health plan but is not a regulated insurance provider under state law. Terms would be outlined in contracts with members and Alfa could select who it provides coverage.

“This is a narrow group of people who are not eligible for government assistance, not eligible for employer coverage,” Alfa President Jimmy Parnell told the committee about the organization’s members. He said coverage is a workforce issue.

“There are a lot of people who want to be self-employed, this would be a product that would provide coverage for them,” he said.

The federation’s corporate side already provides home and auto insurance on the commercial market.

The health plans would not be regulated by the Alabama Department of Insurance as traditional insurance policies are, including the Blue Cross Blue Shield plans already offered to Alfa members.

Ted Hosp, BCBS’ vice president of government relations, spoke against the bill.

“There is no need for this legislation at all,” Hosp said. “Because the truth is that Alfa can sell health insurance today. In fact, they do – they sell ours. And if they want to go out on their own and sell health insurance – they of course have the right to make that decision. But then they should have to follow all the same rules that every other company operating in Alabama – United, Viva, Centene, Blue Cross and others – has to follow.

“This bill is not ‘pro-business’ and it’s not ‘pro-consumer’. It’s just pro-Alfa.”

Six states currently allow similar plans and six more are considering them, Parnell said.

Alfa’s proposal is modeled after Tennessee’s. Ben Sanders, executive director of government affairs for Tennessee Farm Bureau health plans, told lawmakers about how the plan there works. Coverage for a healthy family of four costs between about $400 and $600 per month, he said.

The committee heard from several young farmers who said the bill would save them money.

Evan Nelson, a hay and cattle farmer and father of three from Jefferson County, said his insurance premiums have doubled each year for several years.

He said worries about taking care of his family — not his crop or cows — are what wake him up in the middle of the night.

“It has the potential to be a game changer for young farmers like me,” Nelson said.

While some farmers take second jobs to get insurance, Shelby Easterling, a Barbour County poultry farmer, said that’s not an option for her and her husband. They regularly work 12 hours a day on their farm.

“We choose this lifestyle and we absolutely love it, but out-of-control health care costs are threatening our way of life,” Easterling told the committee.

Jane Adams, government relations director for the American Cancer Society Cancer Action Network, also spoke in opposition to what she said were plans that look like insurance but offer no state protections for individuals diagnosed with illnesses such as cancer.

The bill would let Alfa “cherry pick” healthy consumers, she said.

To that point, Sen. Will Barfoot, R-Pike Road later said an Alfa plan would be a choice for its members to consider, not “involuntary servitude.”

“It’s an option that folks could have,” he said.

Democrats on the committee especially honed in on the lack of regulation. Sen. Bobby Singleton, D-Greensboro, said the Legislature constantly passes regulatory bills.

“Why are we being asked to approve something that’s unregulated?” he said.

He also said that if Alfa wanted to improve health care for the state’s workforce, it should support Medicaid expansion.

The committee did not vote on Wednesday and could take the bill up when it returns from spring break in early April.

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