A new bill to allow the Alabama Farmers Federation to sell health care plans to its members has been filed in the Alabama House.
Alfa officials and sponsor Rep. David Faulkner, R-Mountain Brook, say additional oversight provisions in House Bill 447 are an effort to compromise with bill critics. They say the legislation is needed to help farmers paying high insurance premiums, often to the detriment of their farming businesses.
“With this introduced version, we would be the most regulated Farm Bureau health plan in the country,” Preston Roberts, Alfa’s director of agricultural legislation, told Alabama Daily News. “There’s more in House Bill 477 than any other statute that’s currently on the books.
“Despite that, we feel like we are still able to offer an affordable product to our members with all these changes and satisfy some of the concerns that we’ve heard along the way.”
A public hearing on House Bill 477 is scheduled for Wednesday morning in the House Health Committee. The bill has 39 GOP co-sponsors.
Still, significant opposition remains from those who say the legislation would allow Alfa to offer health plans that look like insurance, but don’t have the same requirements or protections.
Sophie Martin, Blue Cross and Blue Shield of Alabama’s director of corporate communications, said BCBS continues to pursue more amendments that require farm bureau plans to comply with state and federal laws meant to protect consumers.
“Blue Cross still opposes Alfa’s Farm Bureau health plans because they are bad for consumers. If passed as originally proposed, Alfa’s Farm Bureau Health Plans would not be subject to even minimal guardrails including being prohibited from canceling their customers who get sick and suddenly incur more claims, and they wouldn’t be required to include essential benefits like prescription drugs or mental health services. These ‘plans’ could also result in Alabamians being discriminated against based on pre-existing conditions like diabetes or cancer.”
Faulkner said Alfa should be able to offer this option to their members who need to reduce their health care premiums.
“This is not meant to be health insurance as the (Affordable Care Act) came around in 2010 and defined it,” he said. “But it is trying to be an option for some people that won’t negatively impact other people.”
Alfa has said it won’t end coverage for people unless they stop paying their premiums. That’s not in the bill, but it doesn’t need to be, Faulkner said.
“They’re not going to keep members if they don’t run this properly,” he said. “They won’t stay in business if they do the thing that people seem fearful about.”
Alfa argues 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.
The proposal is based on a decades-old Farm Bureau option in Tennessee that’s been duplicated in about 10 other states.
Senate Bill 84, by Sen. Arthur Orr, R-Decatur, was filed Feb. 4 but hadn’t yet received a Senate committee vote.
Faulkner said he’s been talking to parties on both sides of the proposal since last year and House Speaker Nathaniel Ledbetter, R-Rainsville, asked him to file a new bill as the Senate was dealing with another health care-related bill, reimbursement rates for independent pharmacies by pharmacy benefit managers.
“We know that we’re not going to be able to do everything, but we have been trying to diligently listen to the concerns and try to address those where possible,” Roberts said.”This bill is a result of negotiations between us and House leadership and different stakeholders.”
Changes in this bill from the earlier SB84 include:
- A 1.3% state tax on premiums collected by Alfa. Alfa officials said their research shows the plans would be neutral, if not positive, for state revenues, but the new tax guarantees it. “This is an area where working in good faith and coming to the table, we were willing to compromise on,” Roberts said.
- A plan can’t be sold to someone who can participate in an employer-sponsored plan unless the cost to him is more than 9% of his household income.“That was a concern that was expressed to us that these plans would pull people off of employer-provided plans,” Roberts said.
- A requirement that Alfa health plans to have an independent reinsurer to cover the claims that it must pay.
- A requirement that Alfa file with the Alabama Department of Insurance documentation that its health plan reserves “are adequate and conform to the appropriate actuarial standards of practice that govern health benefits.”
- A requirement that Alfa designate an ombudsman to respond to concerns from members via a complaint procedure “similar to the customer complaint procedure under the Department of Insurance.”
- A mandate that health benefits offered include coverage for ambulatory patient services, hospitalizations, emergency services and laboratory services.
While those represent significant changes from where the legislation started, it isn’t enough to satisfy those opposing the plan.
“We have heard stories from farm bureau plan enrollees or applicants in other states who were denied coverage for pre-existing conditions such as previously having cancer, carpal tunnel, diabetes or a biopsy performed,” Jane Adams, Alabama government relations director for the American Cancer Society Cancer Action Network, said. “They are then left with the choice to either skip important care or take on hefty medical bills that could lead to medical debt. These plans are a clear step backward.
“… People need access to real health insurance that is regulated by federal and state law.”
Alfa officials have said that lawmakers can’t do anything about farmers’ rising production costs or fluctuating commodity prices. But they can help lower their health care expenses.
“At the end of the day, the reason we’re doing this is because we’re a membership organization serving farmers, and farmers are struggling financially in lots of ways, but health insurance is one of those,” said Jeff Helms, Alfa’s director of communications.