Lawmakers on the Alabama House Health Committee had a message Wednesday for the Alabama Farmers Federation about its proposal to offer health coverage to members: put your pledges and plans in the bill.
Alfa officials and Rep. David Faulkner, R-Mountain Brook, have said the company’s proposed health plans will give financially struggling farmers a cheaper option to high health care premiums.
They don’t call the plans insurance and have acknowledged they won’t have to accept all applicants.
Faulkner told committee members some farmers are paying about $18,000 a year for health coverage for their families.
“This isn’t for everyone … but it’s an option for some and it could mean economic survival for small business owners and farmers,” Faulkner said about his House Bill 477, which has 39 House co-sponsors.
Opponents of the legislation have said the health plans will cherry pick healthy people but won’t have the same requirements about coverage that insurance providers have to follow under state and federal law. Alfa officials have said they won’t drop coverage for someone if they get sick and that commitment will be in customers’ contracts. But the bill doesn’t guarantee that.
Committee Chairman Rep. Paul Lee, R-Dothan, seemed to agree with some of the oppositions’ concerns.
“You’re going to be able to pick a good crop of people to be on this insurance,” Lee said after nearly an hour of discussion and a public hearing on the bill. “But what happens if you have two healthy young farmers and 18 months from now, they have a child that has cancer and they have to go to UAB (Hospital) or Mobile or Texas (for treatment) and run these bills up. I want those guys to have some assurance that it is an evergreen policy, meaning they have it as long as they pay the premium.
“… I don’t think that’s too much to ask.”
As expected, the committee did not vote on the bill Wednesday.
Faulkner’s is the second version of the Alfa health plan bill introduced this session and he and company officials say it has more provisions and regulations than any other similar law in the country. The proposal is based on a decades-old Farm Bureau option in Tennessee that’s been duplicated in about 10 other states.
Faulkner’s version does include several provisions the original Senate bill did not, including a mandate that Alfa health plans cover ambulatory patient services, hospitalizations, emergency services and laboratory services.
In the committee meeting, opponents asked that mental health services and prescriptions be put into the bill as well.
“Words matter,” said Rep. Frances Holk-Jones, R-Foley. She’s a State Farm agent with 48 years of experience.
Holk-Jones said she’s all for competition and supports Alfa’s intentions, but said what it will offer customers needs to be in black and white.
“I want the words ‘planning on it’ out of the discussion,” she said.
Faulkner said Alfa’s bill has more requirements than similar laws in other states.
“It’s working well in Tennessee, it’s working really well in other states and they don’t have all this in their legislation,” Faulkner told his colleagues.
Alfa has said it expects only about 10,000 people to be covered by the plans. Anyone can be an Alfa member if they pay annual dues.
Alfa officials say too many Alabama farmers are in a “middle-class donut hole,” working for themselves and not having employer-provided insurance plans and making too much money to qualify for significant subsidies offered under the Affordable Care Act.
During the public hearing, proponents described how the average age of an Alabama farmer is rising and costs are making the industry prohibitive for young people.
Phillip Hunter, who owns a tree nursery in Shelby County, told lawmakers he pays more in health insurance premiums than it costs to send his son to Auburn University.
“And they go up, the last three years about $2,000 a year,” Hunter said. His son and nephew are both studying horticulture and plan to work at the farm.
“This kind of health care plan is a solution that’ll let them come back and be successful,” said Hunter, who is also on the Alfa state board.
One of the larger opponents of the Alfa proposal is Blue Cross and Blue Shield of Alabama. Ted Hosp, vice president of government relations for BCBS, said during the public hearing that he knows some version of the Alfa proposal will pass this session, but he asked lawmakers for amendments to the bill, including:
- That Alfa be required to report annually the percentage of premiums spent directly on health care each year. Insurance companies are required to spend at least 80% on care.
- That the Alabama Department of Insurance has the authority to enforce what’s in the law.
- That the plans cover mental health and prescription services.
- That customers can’t be dropped or have their premiums raised if they get ill or seriously injured.
“Allowing one company to sell a product that does not have to comply with the rules that other plans have to comply with is a mistake, but we are not asking you to vote no on this bill,” Hosp said. “And if these four amendments are agreed to, we remove our objection to the bill.