An Opportunity for Virginia's Farmers: Child Health Insurance Plan

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Despite the fact that farming is called America's second most dangerous occupation, farm families and farm workers are substantially less likely to be covered by health insurance than non-farm families. A recent (2000) study in Wisconsin found that 10 percent of individuals residing on farms have no health insurance, while only 6 percent of non-farm residents are uninsured (www.dhfs.state.wi.us/state-grant/medicaid1/Briefing-2.doc). Nationally, the Census Bureau finds that 38 percent of hired U.S. farm workers do not have health insurance. The primary obstacle to purchasing health insurance by farm families and farm workers is cost. The Wisconsin study found high premiums combined with high deductibles and modest coverage were the major reasons for lack of insurance coverage. Affordability was also a critical determinant in the federal study, where poorer workers were much less likely to have insurance. In fact, the Census study found that 53 percent of farm workers with earnings less than two times the poverty threshold did not have health insurance. Health insurance coverage is receiving increasing attention in the national press, but lack of coverage among farm families and farm workers has reached crisis proportions.

Hard data do not exist on insurance coverage for farm families and farm workers in Virginia, and there is no reason to believe that Virginia farmers have better or worse health insurance coverage than national averages. In some states, private health insurance providers have expressly reached out to farmers and farm workers; in many cases (e.g. Connecticut and California) farmer organizations were catalysts in representing farmer interests with the insurance industry. The federal government is currently examining extending tax credits to 100 percent of the purchase value for the purchase of insurance by the self-employed and individuals who purchase insurance on their own (http://www.selfemployedcountry.org/news/20020228taxcredits.html).

The insurance industry and small-business interest groups now provide a number of options that may make individual private insurance more accessible to the small business and self-employed operator. As with any financial product, the purchaser is well advised to invest in product research prior to purchase. This research can begin on the World-Wide Web.

One publicly provided insurance option that can substantially lower insurance costs is Virginia's Family Access to Medical Insurance Security (FAMIS) program. This federally funded program provides low-cost medical insurance for children of working families. Application is quick and can be completed over the telephone (866-873-2647). Employers can, under certain circumstances, link FAMIS coverage through their employee plan, lowering the overall cost of providing the insurance.

Many children of farm workers and even children in farm families will meet the FAMIS eligibility conditions. These conditions are

FAMIS places no burden on the Commonwealth; in fact, the Commonwealth is in real danger of losing federal funding because of under-subscription to the program. Virginia receives approximately $70 million annually in federal support for the program but has had to forfeit some $56 million because too few children are enrolled in the program. This year, the state faces the real possibility of having to forfeit an additional $30-60 million in federal funds. As of May 2002, some 43,000 Virginia children were enrolled in the program, while experts estimate that well over 60,000 children are eligible.

The individual benefits of health insurance are obvious--it provides a means of spreading the financial risks of illnesses and accidents. In addition, employers who provide health insurance can receive substantial benefits from the provision. Healthier, happier, and more productive employees (and their children) are real benefits. Virginia farmers are finding it ever more difficult to find and retain high-quality workers. One key to the recruitment and retention equation may be the provision of health insurance for workers and their dependents. Forward-looking employers who recognize that agriculture has to compete with other employers in the labor market by offering competitive benefit packages, may get a foot up by investigating cost reducing programs such as FAMIS.