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Health insurance is inadequate safety net

Yvette Oloff and her husband are running out of financial options.

It's not today's farm prices and costs putting the squeeze on the Persia, Iowa, farm couple. It's the tightening noose of escalating health insurance costs.

"Higher prices for our crops have helped us," she says. "But we've still fallen $24,000 short the last four years."

Their high-deductible health insurance policy is saddled with riders that exclude Yvette's pre-existing health conditions. "We pay $10,000 per yearfor premiums," she says. "But the policy doesn't cover half of my body."

A 2007 survey of 2,000 farmers and ranchers in seven Great Plains states released this week reveals that the Oloffs are not alone. "One in five have incurred medical debt, or bills from hospitals, physicians, dentists and other providers that they were unable to pay," says Bill Lottero, manager, The Access Project and co-author of the study.

Although 90% of the farmers and ranchers surveyed in Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota and Iowa have health insurance, the survey shows they're depleting savings, incurring debt and delaying medical care because of inadequate coverage.

"This report clearly demonstrates that out-of-pocket expenses must be taken into account, along with insurance premiums when determining if a policy is affordable," says Mark Rukavina, Access Project director.

Major findings also reveal that:

  • In spite of the high rate of health insurance coverage, 26% reported high out-of-pocket expenses in 2006. Half of these families spend $1,700 or more in out-of-pocket expenses.
  • Out-of-pocket expenses resulted in farm and ranch families using up savings, borrowing from banks and payday lenders, incurring credit card debt and withdrawing money from retirement accounts.
  • More than half (54%) of the insured farm and ranch operators got their health insurance coverage through employment off the ranch or farm, while more than a third purchased coverage directly, and 10% had public insurance coverage such as Medicare, Medicaid or State Children's Health Insurance Program.

For most of the past 25 years, the Oloffs were able to cope with health care costs because Yvette had health insurance through her employer. But in 2001 when she was diagnosed with a carcinoid tumor, she was unable to continue her job. After their COBRA coverage ran out, the family was thrust into the individual health insurance market.

The study's co-authors point out that the financial repercussions on families like the Oloffs also threatens rural health care providers. "Many rural health care providers operate on very slim margins and carry debt that impacts their viability," says Alana Knudson, associate director for research at the Center for Rural Health, University of North Dakota School of Medicine, and a co-author of the study. "Medical debt is a financial burden for health care providers as well."

The report is a joint effort of The Access Project, the Center for Rural Health at the University of North Dakota, and Brandeis University. It is the first in a series of issue briefs. Future briefs will break down data by state and examine which farm and ranch families are most likely to be uninsured, the levels and sources of out-of-pocket health care costs, and the relationships among specific insurance characteristics and out-of-pocket expenses.

Yvette Oloff and her husband are running out of financial options.

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