This issue brief examines health care costs and their consequences on farm and ranch families in the Great Plains states. The 2007 Health Insurance Survey of Farmers and Ranchers collected information from 2,017 noncorporate farm and ranch operators in Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota and South Dakota. The great majority of respondents had health insurance, yet one in four reported that their health care expenses contributed to their financial problems. This brief explores which farmers and ranchers are at greatest risk of experiencing financial hardship due to health care costs.

Two measures were used to gauge financial hardship due to health care costs: (1) Households reporting that they spent more than 10 percent of their income on health insurance premiums and out-of-pocket medical costs; and (2) households reporting that their health care costs have contributed to their financial problems.

Key Findings:

• 44 percent of respondents spent more than 10 percent of their income on health insurance premiums and additional out-of-pocket medical and prescription medication costs. For those whose principal occupation was farming or ranching, this figure rose to 54 percent.
• 23 percent of respondents reported that health care costs contributed to financial problems for them or a household member; this number increased to 28 percent for those who said their principal occupation was farming or ranching.
• Those who reported financial problems spent, on average, 42 percent of their income on insurance premiums and out-of-pocket health care costs. Among this group, 64 percent said it made it difficult to pay other bills; 34 percent said it caused them to delay making needed investments in their farm or ranch, and 17 percent said it made it hard to pay off a farm or ranch loan.
• Along with the actual percentage of income spent on health care, a key factor affecting people’s perception that health care costs contributed to financial problems was whether they had to borrow money to cover these costs. Borrowing included taking out loans against their farm or ranch or from a bank or payday lender, increasing credit card debt or withdrawing money from a retirement account.

The findings from this survey are extremely relevant to a number of policy discussions currently taking place—how to provide health insurance coverage to small businesses and self-employed people who have to purchase insurance coverage on their own.