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Farming Without a Net

Health insurance can save the farm, but the process is anything but straightforward.

Agriculture is a dangerous industry. While health insurance can provide a financial safety net, too many farmers and ranchers find themselves uninsured. Suffering an injury or illness without insurance can cost a farm family everything, including the farm itself. While the Affordable Care Act provided new options for farmers to obtain insurance, the cost of coverage can be a difficult pill for many producers to swallow.

In 2016, researchers from the University of Vermont and the Walsh Center for Rural Health Policy at the University of Chicago surveyed farmers and ranchers in 10 states about how health insurance influences their decision making, quality of life, and economic development. The project, named Health Insurance, Rural Economic Development and Agriculture (HIREDnAg), was funded by USDA, and the results were released this week.

Aside from the HIREDnAg survey, the most recent data on the health insurance status of farm operators comes from USDA’s 2015 Agricultural Resource Management Survey (ARMS). It found that 10.7% of farm household members lack health insurance, compared with 9.1% of the general population. The new survey reports that 8% of farmers and ranchers do not have health insurance.

Affordable Plans at a Premium

Finding health insurance and finding affordable health insurance are two different things. According to the HIREDnAg survey, 64% of farmers and ranchers report having a preexisting health condition. That, combined with their average age of 58, means they are vulnerable to higher insurance premiums. “When we surveyed farmers, 65% of them identified the cost of health insurance as a serious problem for their business — above the cost of inputs and other potential economic threats,” says Shoshanah Inwood, assistant professor in the UVM Department of Community Development and Applied Economics.

The HIREDnAg survey shows that even with insurance, 52% of farmers and ranchers are not confident they could pay the costs associated with a major illness such as a heart attack, cancer, or the loss of a limb, without going into debt. Even without a major illness or injury, 45% are concerned they will have to sell some or all of their farm to address aging-related healthcare costs like long-term care, in-home health assistance, or nursing home care.

Most farm families (72%, according to HIREDnAg), have a spouse or operator working off the farm, often primarily for obtaining health insurance. Public sector employers like health, education, and government account for 59% of farmers’ employer-provided insurance, so changes in those options or benefits will affect the bottom line of those families.

According to the ARMS survey, farmers and ranchers purchase their health insurance directly from an insurance company at a higher rate than nonfarmers. HIREDnAg shows 24% of farmers ages 18 to 64 purchased a plan on the marketplace. One third of households have two or more plans in place. When farmers do purchase their own insurance, they often struggle with explaining their complex income streams and business situations to the provider, and it takes them twice as long as the general population to enroll.

Of all Americans, 20% are enrolled in public insurance programs like Medicaid, Tricare, or Children’s Health Insurance Program (CHIP). Farmers and ranchers are enrolled at a lower overall rate than the general population, but young families (18 to 34 years old) are the exception, with 41% enrolled. The HIREDnAg report says expanded Medicaid options allow these young families to have health insurance for their children without having to seek full-time employment off the farm. “This insurance (Medicaid) reduces the risk of farming for me, and I don’t worry as much about being in a really risky occupation,” one survey respondent wrote.

Unequally Insured

When it comes to health insurance, not all areas of agriculture are covered equally. According to the ARMS survey, 41.4% of dairy farmers are without health insurance coverage, almost four times the industry average, and well above any other segment of agriculture. Dairy farmers are also less likely to be covered by employee insurance. Only 30% of dairy households have employer-sponsored health insurance, compared with 56% of the farm population as a whole.

Grain, oilseed, tobacco, and cotton growers are the most likely to be insured – only 5.5% are uninsured – even though their coverage is the most expensive. These farmers have higher average expenditures each year on health insurance premiums ($4,504) and out-of-pocket expenses ($2,746) than any other segment of agriculture, which amounts to 28% of their total value of production. The average for ag as a whole is $3,066 and $1,953, respectively.

What’s Next

The initial HIREDnAg survey may be complete, but the group’s work continues. The research and Extension professionals working on the team plan to host webinars with tax professionals, analyze the impact of state and national policies, communicate with policymakers, and develop educational tools to help farm families make health care decisions.

“Navigating the marketplace can be a very confusing and frustrating process,” says Alana Knudson, codirector of the Walsh Center for Rural Health Policy located at NORC at the University of Chicago. “We’re hoping to streamline that process by making sure tax and health insurance professionals have the tools they need to accurately assess farmer eligibility.”

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