Farming is a risky business. But this article isn’t about the financial side of things. Instead, it is a physically risky business. Farming ranks in the top ten most dangerous occupations in the United States. Unfortunately, research shows that farming has trended towards greater danger over the past five or so year as well.
So, farmers more than many others need insurance, both health and life. Today, we want to talk about health insurance and options for getting it more affordably if you don't’ already have it through someone in the household’s off farm work. Research shows that the majority of farm families insurance comes from either one or both adults working an off farm job, clocking in at around 55-65%.
Even if this is you, you never know when things may change employment wise, so knowing your options may save you some stress in the future. But for the other 35-45% of farmers, how to access insurance affordably is an important issue to discuss, and one that is probably often on their mind. So let’s look at what the insurance landscape offers.
Government provided or subsidized health insurance
Since farms generally generate negative net income, many farmers may qualify for government provided or subsidized insurance, such as medicare or medicaid or similar programs. Each state is unique in terms of its income limits (generally tied to family size), requirements, benefits, costs, and many other factors, but almost all have some program aimed to assist low income individuals and families For farmers who lack the ability or desire to have someone work off farm, this is at least one place to look at before moving on to other, usually more costly options.
For many years, we used a strategy I learned during my college business finance days to lower the cost of our insurance while increasing the coverage and benefits. We started with what is known as a high deductible health plan (HDHP). Such plans generally require a person to rack up some large bills before the insurance kicks in. With such plans, you may be looking at deductible of around $8,000-10,000 dollars. After the deductible is met, you should opt for a plan that pays 100% of any further bills.
So, now you have catastrophic health coverage. But what about a bad cut or a basic broken bone? For such injuries and accidents, we purchased an accident rider/policy. This low cost policy covered up to $7500 dollars per incident, protecting our savings and filling in the hole created by the high deductible plan. This is sometimes referred to as filling the donut in insurance. Deductibles create “donut holes,” spots you don’t have coverage. So the accident policy almost completely fills the donut, providing greater protection at a lower cost.
Many years back while working with some machetes clearing brush on a fence line, deep in the brush one kicked off and caught my shin. Seven stitches and a trip to immediate care were the result. Instead of a thousand dollar medical bill, I had a $50 deductible as the total damage for my bad behavior (and a sore shin and scar to remind me to be more careful clearing brush in the future). The accident rider covered the rest.
With the recent changes to the ACA and all the continuing increases in health insurance costs and changes to health insurance laws, the above strategy has become harder to successfully use, but some still do, so it is another to consider and check on the next time you look at your insurance options.
Health-sharing programs - Liberty, Samaritans, Medishare, and more
In most states, another option for insurance involves various health sharing programs. While many of these are Christian in nature, and thus have varying requirements for who can join (such as church attendance, abstention from smoking, drinking, and other behaviors), a few, such as Liberty Share, are open to anyone regardless of faith or lifestyle.
The cost savings, especially for those with larger families, can be substantial. An insurance policy for us would run well over $1500 a month on the open market currently. With a program like Samaritan’s, we are looking at under $500. You don’t need to be a math major to see the substantial difference! Such programs often also equip and encourage members to negotiate their medical bills, which can create further savings, among other helps and benefits.
There are a few caveats with such programs. First, they generally don’t cover basic checkups. They are true insurance. So, some of those big premium savings are going to go to out of pocket expenses which we will talk about further below. But for many, the savings of a single month or two more than covers any and all out of pocket annual expenses. Also, their overall coverage is often far, far better than standard, basic and even mid level modern insurance.
Second, some require you to front or float until reimbursement arrives. Most healthcare providers are fine with this, since they are used to waiting many months for payment anyway. But on occasion it could be an issue, especially if you have no way to cover these expenses short term. Third, some do have pre-existing condition limitations. So if you go this route, make sure the one you choose best fits your circumstances and needs.
At the same time, depending on your situation, most cover services that regular insurance may not, such as midwifery, herbalism and more. They even may do it if standard insurance in your state won’t! This can make it an attractive option for younger, healthier families that are still in their childbearing years, or for those looking to try treatment approaches outside the what the current model covers.
To learn more about these services, check out this article.
Baling Twine and pocket knives - going no insurance
I did a survey on a major farm FB group that has almost 20,000 members. Out of approximately 150 responses, farmers said this about how they sourced insurance.
How do you get insurance?
% of responses
Off farm employment
Government provided (ACA, medicare/medicaid, VA, etc.)
Health sharing program
Who needs insurance? I got baling twine and scissors!
Purchase a policy
The only interesting thing the responses displayed was perhaps a slight uptick in more farmers going without insurance over the past few years. More samples would be needed to confirm this, but again, I don’t recommend it. A lack of insurance is a one way ticket to financial ruin. But it isn’t an uncommon approach among farmers.
When we first moved out to our farm, after a few years we heard about a doctor who practiced out of his home in our area. His clientele mainly consisted of Amish and Mennonite farmers and families, but a few of us regular folk were delighted to find him. Instead of assembly line, crowded city doctor offices we were accustomed to, for twenty five dollars cash we got fifteen or so minutes per person with him. His care was top notch, our wait times non-existent, and his overhead just about zero to help a few hundred low income families in our area, while still making a great wage.
More and more doctors and practices are moving into cash based business models. Many are still compatible with traditional or alternatives types of insurance outlined above, but they require you to take care of paperwork, filings, and other office type work.
For those using alternative forms of insurance like the above, or those going without insurance, these can further reduce your health care costs and improve their quality. You will be amazed what it is like visiting a doctor who isn’t dealing with all the burdens and nonsense that being tied to insurance creates for their practices.
Also, some regions, like New England, have entire multi-state networks forming around more affordable care options that seek to remove the confusion and costs of insurance from the equation. You can check out to learn more if you are in this region of the country.
Don’t forget about your teeth and eyes
Traditional insurance and health sharing plans usually offer little to no coverage for dental and eye. Thankfully, there are policies and providers or other ways to save big in these areas or at least break even.
When we had a high deductible health plan with an accident policy, we also purchased a dental benefits plan from a place like Delta Dental. The cost of the plan just about equals the cost of our two annual cleanings, which the plan fully covers. Make your two annual cleanings, you make back all your money in premiums (with the added bonus that the premiums may be able to be treated as a business expense, so you may even come out ahead!).
So as long as you do your twice annual cleanings and exams (my hunch is less than half of all people do, which is why these plans are so inexpensive - they are like the gym memberships of insurance. Lots of people have em, but few use em!), you break even on the investment. As soon as you have a cavity or some other issue, you come out ahead.
There are similar policies for eyes, but in our experience, the best option is to stop paying crazy prices for eyeglasses at brick and mortar stores and use online eyeglass providers such as Zenni optical. For under $100 I get three pairs of glasses ever two or so years, and I pay for my eyeglass exam cash, out of pocket every other year. So for around $150 I am good for up to two or more years eyeglasses and exam wise.
How do you handle health insurance? Any of the above options make you think one day you can get everyone back on farm workwise? What else would you want to learn about insurance and health wise as a farmer?