Rural state lawmakers are pushing a plan to allow the Kansas Farm Bureau to offer health insurance coverage to members without having to comply with federal Affordable Care Act mandates in hopes that the influential agriculture group can offer a lower-cost product.
But the proposal is drawing strong criticism from Democrats and health groups because the Farm Bureau would not be required to cover people with pre-existing medical conditions. The Farm Bureau also would face relatively little regulation, and critics of the bill worry that the group could lure healthy individuals away from other, more-regulated plans, making them less affordable.
The state Senate approved the bill Wednesday on a 28-11, sending it to the House. The bill’s support came mostly from Republicans, who see it as an opportunity to give consumers a choice after spikes in health insurance rates that they blame on the 2010 federal health overhaul championed by former President Barack Obama, a Democrat.
The Kansas bill also was inspired by a long-standing law in Tennessee and new ones in Iowa and Nebraska.
“The goal has been stated many times, to increase the number of Kansans with coverage,” said state Sen. Elaine Bowers, a Concordia Republican. “Let’s allow Farm Bureau members across the state to help reach these people, who find the ACA plans unaffordable.”
The bill would allow the Kansas Farm Bureau to provide “benefit coverage” to members and their dependents to cover their health costs.
While its coverage might work like health insurance, the measure, like the Iowa law enacted last year, declares that the coverage “shall not be considered insurance.” That would effectively exempt it from federal mandates and most state insurance regulations.
Gov. Laura Kelly, a Democrat and Insurance Commissioner Vicki Schmidt, a Republican, have not yet taken a public position on the legislation.
The Kansas Farm Bureau has about 100,000 members, and the Senate vote was a testament to its political clout, particularly with rural Republicans. All but one GOP senator — Majority Leader Jim Denning, an Overland Park Republican — supported the bill.
Farm Bureau officials said they expect about 42,000 people eventually to take its coverage if the law passes and that rates will be significantly lower than plans that comply with Affordable Care Act mandates. They said their coverage would be targeted to individuals who either have no coverage now or people who are struggling to find or pay for individual coverage.
Kansas has seen the number of individual coverage plans offered through the federal ACA marketplace decline to 23 for 2019 from 42 in 2016, according to the Kansas Insurance Department. While average rate increases for 2019 were smaller than in past years, they’ve sometimes previously topped 25 percent, according to the department’s annual reports.
House Majority Leader Dan Hawkins, a Wichita Republican, said the bill has appeal among GOP lawmakers outside rural areas because, “a lot of people look at that as a free market thing, giving people choice.”
But Democrats noted that people don’t have to be farmers or work in agriculture to join the Farm Bureau, only pay a $50 annual membership fee. Also, the bill requires only that Farm Bureau file a certified statement of its coverage plan’s reserves annually with the Kansas Insurance Department.
And they honed in on how Farm Bureau would be able to set higher rates or reject coverage for people who have pre-existing medical conditions, a feature of the Iowa law. Groups including the American Diabetes Association, the Cancer Action Network and the National Multiple Sclerosis Society have opposed the bill for that reason.
Senate Minority Leader Anthony Hensley, a Topeka Democrat, proposed an amendment to require the Farm Bureau’s plan to cover pre-existing conditions. But it was voted down, 24-15, with Republicans arguing that such a requirement would eliminate the flexibility Farm Bureau needs to offer an affordable product.
“Consumers with pre-existing conditions will almost certainly surely be turned away or offered excessive prices,” said Sen. Tom Hawk, a Democrat from Manhattan, where the Kansas Farm Bureau has its headquarters.