Sheep rancher Rhonda McClure found headaches in the individual insurance marketplace. (File photo: Grant Gerlock/Harvest Public Media)
For 37 years, Wahoo, Neb., sheep rancher and fiber artist Rhonda McClure got her health insurance through her husband’s off-farm employer. But in January, he turned 65, became eligible for Medicare, and retired. McClure, 59, knew she would be joining the large segment of farmers and ranchers — about 36 percent nationally — who buy health insurance as individuals.
“I started, actually, several months ago and at first I thought that it wasn’t going to be that big a deal,” McClure said. “Until I applied to the first company and they refused me.”
In retrospect, she realized that the company asked some unusual questions on the application: Did she participate in rodeo? Did she ride a motorcycle? Did she ride horses? The regional insurance carrier also asked about her occupation.
Typically, an application asks some basic health questions, requests the applicant’s age and gender, and does not ask about occupation, said Patrick Hageman, an agent at Independent Insurance Services in Marshalltown, Iowa, who works with clients seeking individual insurance plans.
As I reported last week, farmers and ranchers are more likely than others to buy their own health insurance. Like McClure, many have a difficult time striking out in the health insurance marketplace on their own.
Even with the rejection, McClure said she could have continued on her existing insurance under the COBRA law for 18 months after her husband left his job. Doing so can be expensive, though McClure said her quote was reasonable.
“I was just hoping that it would get me through until the health care laws took effect in 2014,” she said, “so that they would not be able to refuse me anymore.”
Hageman said even though there are state pools where someone with a pre-existing condition could, in theory, get health insurance now, the price can be prohibitive. He’s seen farm-family clients make a tough choice. After being rejected by one or more companies, some of his clients are just going without insurance. He’s hopeful they will benefit from the ban on pre-existing condition exclusions under the new law, which might also make the situation easier on McClure.
With the help of an agent like Hageman, McClure decided to apply to a second company. It also rejected her, though this time specifically for a blood test result from six years ago.
“I went in and my doctor suspicioned there could be a problem so she ran a bunch of tests and the one that came back that was questionable was actually for blood sugar,” McClure said. “So according to the medical community, I was, therefore, diabetic.”
Though subsequent tests didn’t register the issue, one problematic test has made things difficult for McClure.
Her agent interceded on her behalf with a third company, which then only requested medical information for the five previous years. When we first spoke, McClure was relieved. They accepted her and she expected the policy, a high-deductible plan linked to a Health Savings Account, to work out for her.
The next day, she emailed me: “I spoke too soon. I heard from my agent this morning, and although company number three did accept me, they also rated me up.” The policy she had selected would cost $90 a month more than she expected.
Hageman said no one will be rejected for a pre-existing condition after Jan. 1, 2014, but companies will still have the ability to charge people more. Still, he’s hopeful the change will help some of his clients get insurance.
“You hate to see somebody going without it,” Hageman said, “so that’s a positive part [of the law].”
On the downside, he said more people will be buying insurance because of the mandate that everyone have it, but the health-care exchanges designed as one-stop marketplaces may steer new prospective customers away from agents like him. He said agents are still waiting for many of the details about how health insurance will work under the new law, but some are not sticking around to find out.
As it is, agents get paid a one-time commission when they sell a policy and while there’s no cost to a customer for getting the policy through an agent, when the exchanges are set up the expectation is that subsidies available through them will not be available to customers buying insurance from an agent or directly from an insurance company. Some customers may have an incentive to skip using an agent. And Hageman said agents may face greater bureaucracy.
“Just simply the red tape you’ve got to get through, the hoops you’ve got to hop through,” Hageman said, “I do believe we’re going to see less and less agents selling it.”
And that’s perhaps especially unfortunate for rural residents. The health-care exchanges are expected to be web-based and that could put people without ready access to reliable broadband at a disadvantage. But more to the point, McClure said, if her agent hadn’t interceded, even the third company likely would have rejected her.
“It really helps to have somebody else behind you to help you out,” she said.