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A golden harvest near Oakesdale.
Photo by Teresa Hodges





Searching for a cure

Health insurance, or lack thereof, drives a myriad of farm decisions

February 2018
By Sue Lani Madsen

Insurance is vital to every farmer’s risk management strategy. And a U.S. Department of Agriculture-funded survey of farmers and ranchers found it’s not just crop insurance that counts. Health insurance is key to a viable ag economy, with significant impacts on succession and retirement planning.

A sample of 1,062 farmers and ranchers in 10 states, including Washington, were surveyed in 2016-17 as part of a study titled “Health Insurance, Rural Economic Development and Agriculture” by HIREDnAg. Seventy-three percent of farmers reported that health insurance is an important or very important risk management strategy.

The HIREDnAg research team included university extension faculty and staff across the nation, led by Shoshanah Inwood, Department of Community Development and Applied Economics at the University of Vermont. “We had farmers on phone interviews thanking us for finally asking the questions,” said Inwood. “They are highly cognizant of how important health insurance and their health is to their operation.”

In addition to income, access to health insurance is a major reason for seeking off-farm employment for three out of four farmers between 18-64 years of age. Working a second job has its own costs. Full-time off-farm employment conflicts with investing time in improving farm profitability through more intensive management or diversification to support the next generation. Part-time work can be a useful source of supplemental income, but health insurance often drives the decision to full time.

Beginning farmers reported appreciating the option to stay on the family health insurance plan until age 26, describing turning 27 as “falling off a cliff.” For young farm and ranch families in the 18-34 year old age bracket, 41 percent were enrolled in public insurance programs like Medicaid (Apple Health in Washington), the Children’s Health Insurance Program (CHIP) or Tricare (for veterans and their families).

Inwood noted the income limits on eligibility for public insurance programs or government premium subsidies also limited choices. Some of those surveyed reported wanting to take on a part-time job to fund farm improvements, but could not risk losing access to health insurance by increasing their income.

The HIREDnAg study plans to break out detailed survey results by state and commodity to support industry leaders in state policy development.

On a national basis, U.S. Department of Agriculture statistics on health expenditures by commodity group indicates grain and oilseed growers experience a raw cost for both insurance premiums and out-of-pocket expenses almost 45 percent higher than the average for producers across all commodities. The statistics lump tobacco and cotton with grain and oilseeds. The higher cost may reflect a higher average age of producers, driving up insurance premiums as well as increasing the probability of significant chronic health conditions and higher out-of-pocket costs.

Healthcare is on the border of major changes in payment methods from both public and private insurance. Now, payment is made on a fee-for-service basis. It’s a perverse incentive for sick care rather than health care. Clinics and hospitals only make money when people are sick. Good healthcare providers see the irony in a focus on treating problems rather than maintaining health.

Future value-based payment systems with a focus on wellness visits are sometimes at odds with farmer attitudes. Joleen Carper, chief of clinical operations at Tri-State Hospital in Clarkston, Wash., grew up on a wheat farm near Grangeville, Idaho. Carper ruefully noted that nine months of the year, wheat farmers are notoriously difficult to get out of the field and in for regular checkups. “And we don’t always have an appointment open when it rains,” she said.

To deal with farmers’ tendency to stoic procrastination compounded by remote locations, Inwood said one suggestion was cross-training veterinarians to provide health and wellness checks on farmers as well as their livestock. Debbie Hoadley, director of ancillary services at Whitman Hospital and Medical Center, had a more old-fashioned suggestion. “We need a return of the house call to really serve the community and a way to get paid for it.”

Innovative ideas to provide better healthcare value usually suffocate up against payment barriers in the traditional fee-for-service system. That’s why the Washington Legislature instructed the Health Care Authority to pursue a new financial model, particularly for the most remote and underserved areas. The Washington Rural Health Access Preservation (WRHAP) group has been working for two years on a pilot project to test a new model that incorporates both cost and value into payments.

The WRHAP group is still negotiating a new payment system with the federal agencies responsible for Medicare and Medicaid. The increasing emphasis on preventative and primary care versus hospital care is not going away, according to Pat Justis, director of the State Office of Rural Health and lead contact for WRHAP. Payment systems, both public and private, will have to change to hold costs down by spending money more wisely on what really matters to good health.

Health insurance policy will continue to be a factor in farm viability. For example, in 2017, an experienced wheat farmer began working towards consolidating parcels to ease ownership transition to the next generation. A rancher neighbor with a relatively new livestock operation needed a little more pasture to secure his profitability. They made a deal. It would have enhanced the viability of both farms.

Then the farmer found himself stuck midyear when his wife became seriously ill. Farm income had been down in 2016, and his family had landed in the Medicaid pool. He had to postpone selling a small parcel to the rancher or risk losing eligibility for “free” health insurance in the middle of a health crisis. His wife was able to see necessary specialists, no preferred provider limits. And moving from Medicaid to a market-based plan with its restricted networks, high deductible and co-pays would not make financial sense.

While grain and oilseed farmers are slightly more likely than the rest of society to have some kind of health insurance in place, more than half are not confident they could weather the costs of a major accident or illness. Health insurance and access to local healthcare are rural economic development as well as ag viability issues.

The HIREDnAg research team will continue their study on the impact of the soft costs of healthcare and health insurance on agriculture through 2018. Inwood invites all farmers to share their stories via the research website or to her at And don’t be surprised to find health insurance access a topic in the next farm bill negotiations.

Editor's Note: This is the second in a two-part series about rural healthcare. To read the first part, download the 2017 December issue of Wheat Life here.