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Finding affordable health coverage can be challenging when you’re a farmer.
If you’re under age 65, you’ve historically had to either secure coverage through an employer (if you or your spouse work off the farm and can obtain employer-sponsored insurance), purchase private insurance or, more recently, pay for coverage through the federal government’s Health Insurance Marketplace.
Let’s take a closer look at the four primary options you have for health coverage:
It’s possible to obtain a group insurance plan through membership in your local farm bureau or association. With association health plans, you cannot be denied coverage or pay a higher premium based on your health status or pre-existing conditions. Your premiums will be affected, however, by the overall health needs of other insured members in your association’s group plan.
If you or your spouse work off the farm, you might be able to sign up for individual/family insurance through the employer’s group plan. Your premiums will depend on the amount the employer contributes, but these employer-sponsored plans can be a great source of savings for your household.
If you’re not eligible for employer-based insurance, you can sign up for individual/family coverage through the Health Insurance Marketplace by provision of the Affordable Care Act.
These on-exchange plans generally cost more, although you may qualify for a tax credit to reduce your monthly premium. Your insurance carrier and plan options will vary based on which state you live in.
In the past, many farmers found themselves with few options other than to purchase off-exchange coverage directly from a private insurance carrier (or through a broker). Without tax credits or employer contributions, this option can be costly for farmers either in terms of monthly premiums, high deductible levels, or both.
[READ NEXT: 5 Questions to Ask When Choosing a Health Plan]
You'll want to read a plan’s summary of benefits to understand all the out-of-pocket costs you can expect when obtaining care.
Here’s a quick breakdown of costs associated with most plans:
Premium: A plan’s monthly premium is the amount you will pay to maintain coverage for yourself and any other dependents on your plan.
Deductible: Your deductible is the amount you’ll pay for care before your carrier pays a larger portion of your bills. Office visit and prescription copayments are not generally applied to your deductible.
Copayments: Your copayment (or copay) refers to the amount you will owe for an office visit or prescription refill. These costs are usually tiered (in-network vs. out-of-network, appointment/urgent care/emergency room, branded vs. generic Rx, etc.).
Coinsurance: Coinsurance is the percentage of responsibility you will have once your deductible has been met. For example, an 80/20 coinsurance level means you will be responsible for 20% (your carrier pays the remaining 80%) of the amount billed after reaching your plan’s deductible limit.
Out-of-Pocket Maximum: Your out-of-pocket maximum refers to the most you will have to pay for health care costs during the plan year before your carrier will pay 100% of all future costs.
Be sure to consider expected healthcare needs alongside possible emergencies, surgeries and other unpredictable medical concerns or complications when exploring your coverage options. By factoring these costs into your budget, you’ll be better equipped to manage expenses when healthcare needs arise.
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