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Access Project Report Finds That Individual Health Insurance Market Fails To Provide Adequate Financial Protection to Farm and Ranch Families
LOS ANGELES (July 23, 2008) – A new report, issued by The Access Project and commissioned by The California Endowment, that surveyed more than 1,700 California family farmers and ranchers finds that approximately one in three must purchase health coverage through the costly individual market because they have no access to lower-cost group coverage. Furthermore, these family farmers and ranchers who purchased health coverage through the individual market spent approximately $4,600 more on premiums and out-of-pocket health care costs than those farmers and ranchers who obtained group health coverage from off-ranch or off-farm employment.
The impact of health care costs on non-corporate farm and ranch operators is significant for a number of reasons. First, family farms dominate U.S. agriculture and they collectively generate 85 percent of the value of production. In California, most farms (98%) are family farms; they produce $32 billion per year in value; and support more than 1.1 million jobs, approximately 7.4 percent of all employment in the state. For farmers and ranchers, health care expenses have the potential to affect not only their families’ economic security, but also the financial viability of their businesses, which may in turn impact the larger, already challenged California and national economy.
“Families that are forced to rely on California’s individual market pay more for their health coverage policies and deductibles, and in many cases this is resulting in these family-owned small businesses carrying on average more than $4,000 in medical and $1,700 in dental debt,” said Carol Pryor, lead author of the report and Senior Policy Analyst for The Access Project. “This suggests that it is no longer just the uninsured who are suffering from high health care costs – those with health coverage are also struggling and, in some cases, delaying needed care.”
The report, 2008 Health Insurance Survey of California Farm and Ranch Operators, cautions that families forced to rely on the individual market for health coverage may have no alternative but to pay high premiums for policies that also include significant deductibles, thus resulting in higher health care costs for those that experience illness. According to a recent report, people in California who purchase health coverage through the individual market bear a much greater share of the cost of care. In 2006, insurance covered 54.6 percent of a typical consumer’s medical bills in the individual market, compared to 83.3 percent in the small group market. Research also shows that Americans delay care due to medical costs and steep insurance premiums. Nationally, only approximately 8 percent of the insured purchase health coverage in the individual market, while approximately 30 percent of California’s family farmers and ranchers have no alternative but to purchase health coverage in the individual market.
“The financial burden on farm and ranch operators that this study reveals represents a significant drain on the ability of these rural businesses to grow and thrive,” added Bill Lottero, co-author of the report.
Robert Ramming, 52, a Yolo County retail fresh-market organic farmer said, "The roughly $8,000 per year we spend on minor medical bills, health insurance premiums, and modest dental & vision care is a major chunk of our family's income and the largest item in our budget. If we can make it to age 65 still in good health, and if Medicare is still functioning and solvent, then maybe my wife and I can start saving for retirement."
Bette Hinton, M.D., M.P.H., Director-Health Officer County of Yolo Health Department said “At a time when non-farm employers are cutting back on their provision of health care insurance to employees, this lack of available/affordable insurance is bad news for Yolo County which has a largely agricultural economy.”
Yolo County Supervisor Helen M. Thomson said “Yolo County’s long standing commitment to agriculture includes ensuring there is an adequate health care delivery system for farmers, their families and their farm workers. This study demonstrates the tough fiscal reality of obtaining health insurance and the costs and impacts of illness on California's farmers. This is an escalating crisis we all now face.”
Other significant findings of the report include:
• More than half (55%) of respondents obtained health coverage through off-farm or off-ranch employment.
• Among those who said their principal occupation was farming or ranching, nearly half (48%) bought insurance through the individual market.
• Even though most respondents had health insurance, about one in four (26%) had to dip into their financial resources to pay for health care. Of these seven in 10 had to use family savings, almost three in 10 increased their credit card debt, 15 percent borrowed against their home or business, and more than one in 10 (11%) withdrew money from a retirement account.
• Thirteen percent of respondents said they had debt resulting from medical or dental bills. Among these respondents the average amount of medical debt was $4,276 and average amount of dental debt was $1,760.
• Sixteen percent of respondents said they or a household member delayed seeking needed health care services, with the majority (65%) saying the primary reason for delaying care was because they could not afford the cost.
• On average, farm and ranch families reported spending $8,817 on health insurance premiums and medical out-of-pocket expenses; this translates into spending of over $700 a month.
• More than half (54%) of respondents reported that they had household incomes between $20,000 and $99,000. For many of these families, average overall health care expenditures constituted between nine and 44 percent of their income.
“Clearly, our current system of health coverage is not supporting the health care needs of all Californians. The individual health coverage market is fraught with high costs and uncertainty for consumers,” said Robert K. Ross, M.D., president and CEO of The California Endowment. “And now we’re seeing a number of these family businesses struggling to meet their health care costs because the policies available to them are not adequately covering their health care expenses, leaving them to bear the burden.”
Click here to access the report. Interviews with family farmers surveyed for the report can be facilitated by contacting Jeff Okey at (213) 928-8622 or via email at jokey@calendow.org.
NOTE TO EDITORS: The Access Project in partnership with the Yolo County Public Health Department will be holding a discussion about the growing burden of health care costs on California’s family farmers and ranchers at 10 a.m. on July 31 in the Walker Room of the Herbert Bauer Alcohol, Drug, and Mental Health and Health Department located at 137 N. Cottonwood Street, Woodland, CA 95695. RSVP by Monday, July 28 to Norma Springsteen at norma.springsteen@yolocounty.org.
About The Access Project:
The Access Project has served as a resource center for local communities working to improve health and healthcare access since 1998 and is a program of Third Sector New England. The Access Project is a research affiliate of the Schneider Institute for Health Policy at Brandeis University. The Schneider Institute is part of Brandeis’ Heller School for Social Policy and Management. The work of The Access Project embodies the Heller School motto, “Knowledge Advancing Social Justice.”
About The California Endowment:
The California Endowment, a private, statewide health foundation, was established in 1996 to expand access to affordable, quality health care for underserved individuals and communities, and to promote fundamental improvements in the health status of all Californians. Headquartered in downtown Los Angeles, The Endowment has regional offices in San Francisco, Sacramento, Fresno and San Diego, with program staff working throughout the state. The Endowment makes grants to organizations and institutions that directly benefit the health and well-being of the people of California. To date, The Endowment has awarded approximately 9,800 grants across California totaling nearly $1.8 billion. For more information, visit The Endowment’s Web site at www.calendow.org. |
