House Farm Bill Contains Funds for Rural Association Health Plans

Tucked inside the massive House farm bill now under consideration is a measure to help fund rural association health plans to the tune of $65 million over four years, to be doled out at the secretary of Agriculture’s discretion.

Under the bill, starting next year, the secretary  could grant up to 10 loans of no more than $15 million each to existing associations whose members are ranchers, farmers or other agribusinesses.

The House farm bill contains funding for rural health care associations.

The Trump administration has been pushing association health plans as a means to lower insurance premiums for consumers as an outside-of-Obamacare option.

These associations at first blush might appear to be second cousins to an early effort by the Affordable Care Act (ACA, or Obamacare) to provide alternatives to the big insurers.

When the ACA first burst upon the scene in 2014, the measure funded 23 health care cooperatives, but those organizations quickly ran into trouble for a variety of reasons, including cost and lack of administrative experience. Now, almost five years later, only three co-ops remain — the Maine Community Health Options, the Montana Health Cooperative and Wisconsin’s Common Ground Healthcare Cooperative.

“The lesson of the co-ops is that insurance is a tricky business,” Dan Mendelson, chief executive of Avalere Health, told the Washington Post. “Just like you wouldn’t ask your cousin to do brain surgery on you, you probably wouldn’t ask your cousin to underwrite your health risk.”

Though the failure of the co-ops might spell trouble for the putative health associations, critical differences exist. The co-ops had to sign up anybody who wanted a policy, sick or healthy, and they also had to adhere to the standards of the ACA in the services they funded. They also self-administered their plans.

Associations for the most part already know who their consumers will be and can price policies accordingly. Also, they will be subject to state standards, not ACA standards. Finally, they will be relying on third-party, experienced organizations to run their health plans.

As an example, Iowa has already set in motion its own association health care plan for the Iowa Farm Bureau Federation, and has passed legislation so other groups can offer such plans as well.

In the long run, it remains to be seen if this funding survives a House vote, and is then left intact in the Senate version, but for now, the administration is looking to seed some rural health associations in areas largely under-served by Obamacare policies and the big insurance companies.

NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
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