Holes in Rural Insurance

During year-end meetings with farm clients, Minneapolis-based consultant Rod Mauszycki, heard farmers pose a question the veteran tax adviser had never heard before, "What's the penalty for not carrying health insurance next year?" "Many farm families are getting charged $20,000, $30,000, or even close to $40,000 in premiums and out-of-pocket costs before their insurance kicks in," said Mauszycki, a principal with Clifton Larson Allen LLP's agribusiness and cooperative group. "The federal penalty of $1,000 to $2,000 is relatively minor. If they don't get sick, they just saved $20,000 to $40,000." "Now is a difficult financial time for U.S. agriculture when farmers are breaking even at best," he added. "Banks are pressuring them to cut expenses or pay down debt, so some farmers are deciding to put their business needs before their personal needs." No matter that Congress is debating the repeal and replacement of the Affordable Care Act, a political exercise that could take months or even years to clarify details. Major insurance companies are abandoning individual policy coverage that has been the gold standard for self-employed business owners and farmers nationwide. Many American farm families now face an immediate health care crisis: Their net farm incomes have plummeted in the most severe farm recession since the 1980s, just as the cost of private insurance is soaring.