WATCH YOUR STEP

WATCH YOUR STEP



WATCH YOUR STEP

Introduction

The national debate on health care reform focuses on making the private insurance market more socially efficient by reducing the number of uninsured. At the time of this writing, it is uncertain what national health insurance reform may be enacted—be it implementing a public plan option provided by a National Health Insurance Exchange, expanding Medicare and Medicaid to cover larger segments of the population, or mandating health insurance. Thrown into this mix of options is the cooperative provision of health insurance. To inform this discussion, we review the previous problems Pennsylvania dairy farmers had in accessing affordable health care—leading to the formation of the Farmers' Health Cooperative.

While many farmers operating in remote rural areas may have limited access to health care practitioners, a more fundamental problem is access to affordable health insurance. Although today's farmers do not fall into the conventional categories of disadvantaged groups, the occupational hazards of farming make them an at-risk group that drives health insurance premiums to levels that exceed their willingness and ability to pay. Because farmers traditionally enter the health insurance market as individual purchasers and not part of larger pools, their burden of health care costs is substantially higher. Even if they make informed choices, farmers may face higher premiums and lower coverage than other individuals with comparable health characteristics. In many other states, the rich tradition of agricultural cooperatives provides a significant potential for health care delivery. Instead of transacting as high-risk individuals for health insurance, farmers can increase their bargaining power by forming a health insurance cooperative to purchase affordable group health insurance. The impetus behind the formation of Farmers' Health Cooperative of Pennsylvania (FHCW) is simply that collective bargaining increases purchasing power—farmers can get health care coverage for a better value than buying it on their own. By pooling farmer interests and using the existing regulatory environment to form cooperatives we describe how farmers were able to improve upon their existing market choices of health care coverage. But, can lessons be learned from this experience about the viability of the cooperative option for other underserved segments of the population?

Background and Significance

The graying of America, a well-recognized demographic trend, is increasingly evident among our population of farm operators. While a larger share of older operators has long characterized U.S. agriculture, there is evidence that the number of younger persons entering farming is decreasing. The average age of farmers within the United States is 54.3 years and the proportion of farmers age 55 and over has risen from 37% in 1954 to 61% in 1997. In contrast, the share of farmers less than 35 years old has declined from 15 percent in 1954 to 8 percent in 1997. According to the U.S. Census of Agriculture, the only age category showing a substantial increase in 1992 included farmers age 70 or older.

Research in Progress

Several studies are currently focus on the older farmer and retirement. Task Retirement of Older Farmers, by ...