According to a new study by The Access Project, nearly a quarter of non-corporate farm and ranch operators report spending a startling 42 percent of income on healthcare coverage and medical costs.
"The 2007 Health Insurance Survey of Farm and Ranch Operators," sponsored by the Robert Wood Johnson Foundation, shows that while nine out of 10 farm and ranch operators have health insurance, almost a quarter (23 percent) say insurance premiums and out-of-pocket costs cause financial difficulties for themselves and their families. Another 44 percent of farm and ranch operators report spending at least 10 percent of annual income on health insurance premiums, prescriptions and out-of-pocket medical costs.
Farm and ranch operators cite the need to purchase individual non-group insurance as a leading cause of financial stress. Such insurance typically costs more and covers less.
"Unaffordable insurance costs and medical bills can seriously threaten any family's financial stability," said Carol Pryor, lead author of the report. "But for hardworking farm families, it affects the viability of their business and the strength of the rural economy," The study shows that farmers and ranchers purchasing non-group insurance spent, on average, twice as much on healthcare as those covered by off-farm employment. The median amount spent on non-group insurance was $11,200 a year, including premiums and out-of-pocket costs. The median off-farm insurance cost was $5,600 a year.Nationally, only 8 percent of Americans purchase health insurance on the open market, compared to nearly one-third (36 percent) of study respondents.
"Farmers and ranchers, like millions of small business owners, face serious obstacles paying for health coverage that is both comprehensive and affordable. This study can help policy-makers think about this as they consider health reform," said Risa Lavizzo-Mourey, president and CEO of the Robert Wood Johnson Foundation. "The rising cost of healthcare is affecting everyone, whether insured or not. Many people have policies with premiums and co-pays that are so high that important, preventive care is unaffordable to them. That can create difficult trade-offs between caring for your health and stabilizing your finances."
More than a quarter of respondents said they were forced to draw on other financial resources to cover health costs, with 65 percent tapping into family savings. Nearly one in four incurred credit card debt. Others took out loans, borrowed against their farm, withdrew money from retirement accounts or turned to friends and family for help.
The Access Project partnered with researchers at Brandeis University and the Center for Rural Health at the University of North Dakota, as well as the U.S. Department of Agriculture's National Agricultural Statistics Service.
A random telephone survey of non-corporate farm and ranch operators in seven states was conducted, with 2,017 surveys completed, for a response rate of 80 percent. The study states were Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota and South Dakota.