Farm co-ops extend deadline for health plan sign-ups

Two new co-op health plans have extended into late December the sign-up period for Minnesota farmers seeking 2018 coverage.

State lawmakers passed legislation earlier this year for the new co-op coverage, which is an alternative to the state's troubled individual health insurance market under the federal Affordable Care Act (ACA).

The plans are being closely watched since they have the potential to alleviate cost pressures for some farmers, but might also hurt the traditional health insurance market for individuals by pulling healthy people from the risk pool.

"Due to the late harvest this year we had multiple requests from our farmers for more time to assess their insurance options," said Brooke Dillon, a spokeswoman with Arden Hills-based Land O'Lakes, in an e-mail.

St. Paul-based 40 Square Cooperative Solutions, the other new health plan sponsor, also cited the late harvest in its decision to extend open enrollment to Dec. 20. At Land O'Lakes, the deadline is now Dec. 29.

Char Vrieze, the program manager at 40 Square, said her group has received nearly 300 completed applications for coverage from farmers. Each completed application represents one or more people buying coverage, depending on family size.

Previously, organizers said they would need 500 completed applications to move forward with the plan, but Vrieze said the group's reinsurance company decided the response thus far was large enough to warrant a green light. The completed applications represent more than 560 individuals, Vrieze said.

Applicants for coverage from 40 Square are asked questions about their medical history. Based on the responses, 40 Square could charge significantly higher premiums.

Mike Panka, an agent with Farmers Union Insurance Agency, said one client he worked with could have seen his monthly premium jump from $700 to between $1,600 and $2,200, depending on responses to the health questions.

Enrollees must attest to the truthfulness of their applications, and coverage can be invalidated in the event of fraudulent/untrue statements or intentional misrepresentations, Panka said. His agency is owned by Minnesota Farmers Union, a prominent group for farmers that has purchased shares in the 40 Square co-op.

The health questions are giving 40 Square organizers a good sense for what sort of risk the group might have for generating expensive medical bills, Panka said.

Critics, however, said the practice of using the health information to set rates — a process called "medical underwriting" — could make the coverage attractive only to healthy individuals, effectively pushing those with costly illnesses into the individual market. Under the ACA, health insurers selling individual policies are not allowed to deny coverage, or charge higher premiums, based on pre-existing conditions.

Farmers are among the roughly 166,000 state residents who buy individual health insurance policies, which primarily cover people under age 65 who are self-employed or don't get coverage from their employer.