Affordable Health Insurance Elusive In Rural U.S.
Larry Harbour of Broken Bow, Neb., sprays chrome plating on plastic wheel caps in his detail shop. - Larry Harbour of Broken Bow, Neb., sprays chrome plating on plastic wheel caps in his detail shop. Like many rural small business owners, Harbour finds health insurance too expensive but worries that he's one injury or illness away from losing his business. (Howard Berkes/NPR)
Correction
September 15, 2009, 12:11 PM - The audio and a previous Web version of this story said that Larry Harbour and his wife were uninsured because of insurance plans requiring from $24,000 to $40,000 a year in premium payments alone. Harbour now says he misspoke and that the premiums he referred to were actually half that amount, from $12,000 to $20,000 a year.
Larry Harbour is celebrated in Nebraska as a model entrepreneur. But the 33-year-old owner of LB Custom Chrome and Detail in rural Broken Bow, Neb., is an illness or injury away from losing his business.
"If anything were to happen to my wife and I, the business is sunk," Harbour said, standing in the shop he built from scratch. "It's like playing Russian roulette. Every day, we wonder when it's going to happen — if something's going to happen, are we able to afford it?"
Harbour has a son and daughter who are covered by a state health insurance plan for children. He and his wife searched for their own coverage, but found premiums would cost from $12,000 to $20,000 a year, plus a $2,000 deductible. Both are healthy and young, and both work supplemental jobs as school bus drivers, but the jobs don't come with insurance.
(Howard Berkes/NPR)
He said the insurance he and his wife investigated was basic, to the point where the couple would have to pay more for the insurance than they would for the health care they'd receive.
"It's unaffordable for me, especially being a small business owner, because I don't have a certain amount of employees to be able to get a better rate," Harbour said.
The Harbours are not alone. Half of all jobs in rural places are tied to small businesses, a rate 13 percent higher than in cities and suburbs. And people who work for small businesses are twice as likely to be uninsured, according to Jon Bailey of the Center for Rural Affairs in Lyons, Neb.
(Howard Berkes/NPR)
"The two biggest determinants of un-insurance in this country are the owner of a small business or employee of a small business," reported Bailey, who co-authored an April 2009 study describing the rates of uninsured and underinsured rural Americans. "And that's more common in rural areas."
Ranchers, Farmers And Individual Insurance
Also common in rural areas are farmers and ranchers, who disproportionately depend on individual insurance plans. Bailey said one-third of farmers and ranchers depend on individual insurance. That's four times the rate for everyone else.
(Howard Berkes/NPR)
"Data show that 90 percent of farm and ranch families do have insurance," Bailey said. "But the places where they depend on getting their insurance are becoming rarer and rarer, which means they'll have to depend on the individual market, which costs more and provides less coverage."
Some farmers and ranchers have off-farm jobs that provide insurance. But those jobs are harder to come by in this economy. So, many are forced to buy coverage with high premiums or high deductibles or both. That's what Dan and Lorna Wilson found when they searched for insurance.
Insurance With A $5,700 Deductible
(Howard Berkes/NPR)
The Wilsons are both 57 years old, and they raise organic hogs, corn, soybeans and grain on 640 acres of rich, black earth in Paullina, Iowa. They are depending on their farm to fund their retirement, and they plan to pass it on to their kids. So their health insurance is more about their farm than their health.
"We probably have a net worth that we could weather one major incident," Dan Wilson said. "But it would severely deplete the farming assets. So, we're insuring the farm."
The Wilsons describe themselves as healthy, but the best individual insurance plan they could find costs $492 a month. That's for Dan and Lorna and one of their children. Their deductible is $5,700. They also have a tax-free health savings account, but they've only been able to save about $2,100 so far.
(John Poole/NPR)
"[That's] not our full deductible," Lorna Wilson said.
She explained that it's hard to make deposits in that account, given the farm and family bills. "They seem to take precedence," she said, noting that the high deductible means the insurance plan has yet to actually pay any health care costs.
"It's just for major medical," she said quietly. "It's just that kind of security there that you have something in case you'd had a huge medical bill."
(John Poole/NPR)
Why Individual Insurance Costs More
The costs are higher because of the nature of individual insurance. There isn't a large group to spread risk. And the rural population trends older and sicker, according to studies quoted by Bailey. There is also less access to health care in rural places, he added. On top of that, farming and ranching are considered risky professions.
Higher rates have additional costs. Bailey cited surveys showing that farmers and ranchers dip into savings accounts and even take out loans to pay for health care.
(John Poole/NPR)
"That means that money that is being used for health care can't be reinvested in the business," Bailey said. "So, you end up with lower retirement savings, lower savings in general [and] higher debt loads than you would otherwise because of higher health costs."
There's another cost for both underinsured rural families like the Wilsons and uninsured rural families like the Harbours. Bailey said people with no or costly insurance are less likely to get the preventive care that could help them stay healthy.
"And then you're going to end up later on in life with the more expensive conditions that could have been discovered early on," Bailey added. "So, the kind of insurance people in rural areas have ends up having significant consequences later on in life."
(Howard Berkes/NPR)
Should The Government Get Involved?
Bailey's group, the Center for Rural Affairs, favors some kind of government-provided insurance alternative. Harbour isn't sure what to make of proposed changes in the health care system. He's no politician, he said. The Wilsons worry that government involvement means excessive government control.
An hour north and east of the Wilson farm, farmer Linus Solberg climbs down from his cultivator and climbs into a car to get out of the wind and to lay out his concern about health care reform. Solberg has hosted presidential candidates and inquiring reporters, so he's ready with a firm point of view.
"Health insurance is killing rural America," Solberg said. "Because people just can't keep up and pay their bills. And that shouldn't be in America."
Solberg, 69, is covered by Medicare, but he worries about his 60 million neighbors in rural America.
"We can put people on the moon," he said. "We can go up and fix this Hubble satellite that we have up there. And we can't have health care for all these people. It's ridiculous."
9(MDAyNzUwMDI2MDEyNTA3MTU5NzcyNTQyNA004))
LIANE HANSEN, host:
People in the country's smallest and most remote places are watching this health care overhaul closely. Rural Americans are more likely to be self-employed and either uninsured or underinsured. Many face high premiums and high deductibles, and they're hoping for a new system that makes health insurance affordable. More from NPR's Howard Berkes.
HOWARD BERKES: All Dan Wilson really wants to do is, well, be with his pigs.
(Soundbite of pigs)
BERKES: It's breakfast time at Wilson's wind-swept organic farm in Paullina, Iowa. And as the porkers munch, Wilson reflects on a lifetime of pig personality.
Mr. DAN WILSON: Well, some of them are very friendly. They come up and they want their ears scratched every morning, or some of them are very standoffish. Some of them are very selfish. Some of them are very laid back. Some are very, very social, and other pigs don't care whether you're around or not as long as they've got feed to eat, they're happy.
BERKES: And they must be happy now with ground corn pouring from a massive metallic spout into feed buckets. Wilson seems happy to feed them and to raise corn, soy beans and grain on 640 acres he hopes to pass on to his kids. But around their own feed yard, their kitchen table, Dan and Lorna Wilson worry about protecting the farm if serious illness or injury strikes.
Ms. LORNA WILSON: You know, if we really had, like, surgery - like, our daughter just had emergency appendectomy and it was 18,000 for that surgery alone, and if she hadn't had her boss' insurance, that would've been all her cost. It would've been really difficult for her to pay that. So it's just that kind of security there that you have something in case you had a huge medical bill.
BERKES: That something is individual insurance. Most farmers are self-employed, after all. And the Wilsons don't have off-farm jobs for group insurance - those jobs are hard to come by in this economy. They're 57 years old and healthy, but the plan they can afford costs about $500 a month - that's for Dan and Lorna and another child. Their deductible is close to $6,000 and they have 2,000 in a health savings account.
Ms. WILSON: Not our full deductible.
BERKES: Is it hard to get that thing filled? And why is that?
Ms. WILSON: Bills.
(Soundbite of laughter)
Ms. WILSON: They seem to take precedence over it.
BERKES: So with that kind of deductible, does your insurance ever end up covering anything?
Mr. WILSON: So far not.
Ms. WILSON: Not. No.
(Soundbite of laughter)
Ms. WILSON: It's just for major medical.
BERKES: And because the farm is the Wilsons' 401(k), their retirement plan, and their children's inheritance, they're not really insuring their health.
Mr. WILSON: We probably have a net worth that we could weather one major incident, but it would severely deplete the farming assets. So we're insuring the farm. You know, it's the next generation that would really pay if we didn't have this.
BERKES: A third of farmers and ranchers depend on individual insurance plans. That's more than four times the rate for everybody else, according to a study from the Center for Rural Affairs, where Jon Bailey is a policy analyst.
Mr. JON BAILEY (Policy Analyst, Center for Rural Affairs): Surveys have even shown that farmers end up having to take out loans to pay for health care. So that means that money that's being used for health care can't be reinvested in the business or it has to be used for more credit. So you end up with lower retirement savings, lower savings in general, higher debt loads than you would otherwise because of higher health costs.
BERKES: The costs are higher because of the nature of individual insurance. There isn't a large group to spread risk and the rural population, Bailey notes, trends older and sicker. There's less access to health care. And farmers and ranchers are in risky professions. Even people in towns face high costs -people who own or work in small businesses. That's half of all rural workers -a rate 13 percent higher than in cities and suburbs. Many simply forgo insurance.
(Soundbite of spray painting)
BERKES: In Broken Bow, Nebraska, 33-year-old Larry Harbour sprays chrome plating on the plastic wheel caps for a Mazda four-wheel drive pickup. He works in a white hazmat-type respirator and suit inside a portable and plastic paint booth.
Harbour's LB Custom Chrome and Detail shop is so successful, he's celebrated as a model entrepreneur in Nebraska. But he says he's one illness or accident away from losing his business.
Mr. LARRY HARBOUR (Owner, LB Custom Chrome and Detail): My insurance situation is zero - I don't have any. It's to the point where it's unaffordable for me, especially being a small business owner because I don't have a certain amount of employees to be able to get the better rates. And the insurance that we were checking out, it was just the basic minimum - to a point where we actually have to pay out more for the insurance than we actually do the service.
BERKES: Harbour's two kids are covered by a state plan for children, but he and his wife were looking at premiums of from 24 to $40,000 a year. That's just premiums. Add another 2,000 for the deductible. Both are healthy and young, and both work supplemental jobs, but they don't come with insurance. [POST BROADCAST CORRECTION: Harbour says he misspoke and that the premiums he referred to were actually half that amount, from $12,000 to $20,000 a year.]
Mr. HARBOUR: If anything were to happen to my wife or I, the business is sunk and hopefully we don't have to put our house up for mortgage just to try to compensate for the hospital bills. It's like playing Russian roulette. Every day we wonder when it's going to happen, if something's going to happen, are we able to afford it?
BERKES: People who work for small businesses are twice as likely to be uninsured, says Jon Bailey of the Center for Rural Affairs, who adds that the uninsured and underinsured are less likely to get the preventive care that could help them stay healthy.
Mr. BAILEY: And then you're going to end up later on in life with the more expensive condition that could've been discovered early on. So the kind of insurance people in rural areas have ends up having significant consequences later on in life.
BERKES: Bailey and his group have lobbied the White House for some kind of government-provided insurance alternative. Larry Harbour isn't sure what to make of insurance reform. He's no politician, he says. Dan and Lorna White worry that government involvement means excessive government control. Farmer Linus Solberg of Cylinder, Iowa is willing to try socialized medicine, because health insurance, he says, is killing rural America.
Mr. LINUS SOLBERG: Because people just can't keep up and pay their bills - and that shouldn't be in America, you know. We can put people on the moon. we can go up and fix this satellite that we have up there. And then we can't have health care for all these people. It's just ridiculous.
BERKES: Sixty-nine-year-old farmer Linus Solberg has Medicare, so he's covered. But he worries about his 60 million neighbors in rural America.
Howard Berkes, NPR News.
(Soundbite of music)
HANSEN: You can find statistics about health care coverage in rural America, and visit Dan Wilson's hog farm at our Web site, npr.org. Transcript provided by NPR, Copyright National Public Radio.
