Major change to Alabama health insurance market approved by lawmakers
State lawmakers on Thursday approved legislation that will allow the Alabama Farmers Federation to sell health care plans to their members that can bypass federal requirements and turn people away for preexisting conditions.
The Alabama Senate voted 30-2 for the bill. The legislation now goes to Gov. Kay Ivey for her signature.
The bill would allow the Alabama Farmers Federation (Alfa) to sell health plans to farmers and anyone else who joins the organization. The bill specifies that the plans, even though they would provide benefits to pay for medical visits, hospitalizations, and other costs, are not classified as health insurance.
The plans would not have to comply with the Affordable Care Act requirements and could deny coverage to people because of preexisting conditions.
Republican Sen. Arthur Orr said the proposal provides an option for people who want to participate.
“Folks, for me this is a freedom of contract issue. This is for individuals and an organization being able to engage in a contract for health care and the government has no role, or a very limited role in that,” Orr said.
Orr said 11 other states including Tennessee and Iowa have similar laws in place.
Similar legislation passed the Missouri Senate in March and is now pending in its House, with two weeks remaining in the legislative session.
Missouri Republican Senate Majority Leader Tony Luetkemeyer on Thursday touted the legislation as “a common sense health care solution” for organizations such as the Missouri Farm Bureau, which is backing the effort.
“It will be especially valuable for rural families who are self-employed in Missouri – small business owners who have been struggling with skyrocketing premiums,” Luetkemeyer said.
Supporters said the bill provides a needed and less expensive option to farmers and others who are struggling with high health care costs. Opponents argued the plans will skirt federal requirements and create an unlevel playing field by allowing the group to refuse to sell plans to people with expensive medical conditions— something that traditional insurance plans cannot do.
Senate Democrats unsuccessfully pushed for amendments that would require Alfa to accept people with preexisting conditions and to give the Alabama Department of Insurance oversight over the plans.
Senate Minority Leader Bobby Singleton said the changes would ensure farmers get a health plan that will “really benefit them.”
“We need to protect people on their preexisting conditions. These farmers work in dangerous conditions on a daily basis. Every farmer handles chemicals on a daily basis,” Singleton said.
Orr countered that people will leave the plan if they are unhappy with the coverage. People who enroll would be required to sign a notice that the benefits “are not provided through an insurance policy.”
Republican Sen. Jack Williams said farmers are struggling with insurance costs on top of the other financial pressures of running a farm. He said his 27-year-old grandson pays $2,400 monthly to buy insurance for his family.
“If we don’t do something to help our young farmers out, we’re not going to have any because they have to go to work somewhere else just to get insurance,” Williams said.
Lawmakers earlier added several changes to the bill they said were aimed at boosting protections for consumers. Any monetary cap on benefits could not be less than $2 million per enrollee. The plans, while they could deny coverage to new applicants because of their health history, could not kick people off the plan or increase premiums because of an illness or medical event. People who have access to employer-sponsored plans would be ineligible to buy the plans.
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