Study Shows America's Farm and Ranch Families are Struggling With Rising Costs of Health Care

    • September 16, 2008

America's farm and ranch families are paying top dollar for health insurance that inadequately covers their needs and causes them significant financial risk, according to a report released today from The Access Project and sponsored by the Robert Wood Johnson Foundation.

The 2007 Health Insurance Survey of Farm and Ranch Operators shows that while nine in 10 farm and ranch operators have health insurance, nearly a quarter (23%) report that insurance premiums and other out-of-pocket health care costs are causing financial difficulties for themselves and their families. These families report spending an alarming 42 percent of their income on health care coverage and medical costs. In addition, more than four in 10 farmers and ranchers (44%) report spending at least 10 percent of their annual income on health insurance premiums, prescriptions and other out-of-pocket medical costs. Farm and ranch operators are especially hard hit because they are often forced to buy insurance on the individual, nongroup market, where insurance costs more and often covers less.

"Unaffordable insurance costs and medical bills can seriously threaten any family's financial stability. But for hardworking farm families, it affects the viability of their business and the strength of the rural economy," says Carol Pryor, senior policy analyst at The Access Project and lead author of the report. "America's agricultural system is still dominated by family-owned farms, and ensuring their stability is critical to our nation's future. The financial impact of rising health care costs on family farms threatens our country's rural heritage, potentially affecting tens of millions of Americans."

The study shows that on average, those farmers and ranchers purchasing insurance in the nongroup market spent twice as much on health care as those who got their coverage through off-farm employment. The median amount spent by farmers and ranchers who got insurance on the nongroup market was $11,200 a year (including premiums and out-of-pocket costs), compared to $5,600 spent by people who got insurance through employment off the farm or ranch. Approximately one-third (36%) of the study's respondents purchased health coverage on the open market. Nationally, only 8 percent of Americans obtain their health insurance this way.

"Farmers and ranchers, like millions of small business owners, face serious obstacles paying for health coverage that is both comprehensive and affordable. This study can help policy-makers think about this as they consider health reform," says Risa Lavizzo-Mourey, M.D., M.B.A., president and CEO of the Robert Wood Johnson Foundation. "The rising cost of health care is affecting everyone, whether insured or not. Many people have policies with premiums and co-pays that are so high that important, preventive care is unaffordable to them. That can create difficult trade-offs between caring for your health and stabilizing your finances." 

One-fourth of those surveyed (26%) report having to draw on other financial resources to cover the costs of care, with 65 percent dipping into family savings. Nearly one in four (22%) incurred credit card debt or increased existing debt. Others took out a loan, borrowed against their farm, withdrew money from a retirement account or turned to friends and family for financial help. 

"Being able to afford health insurance coverage that provides true protection is increasingly a middle-class concern," says Bill Lottero, field director of The Access Project and co-author of the report. "Unaffordable health care costs saddle people with medical debt and threaten their long-term security by draining their savings and money set aside for retirement and other long-term needs."

This survey is the first to closely examine the specific challenges and financial burdens of health care costs on farmers and ranchers. The Access Project, partnering with researchers at Brandeis University and the Center for Rural Health at the University of North Dakota, contracted with the U.S. Department of Agriculture's National Agricultural Statistics Service to conduct a randomized telephone survey of noncorporate farm and ranch operators in seven states. The study states were Iowa, Minnesota, Missouri, Montana, Nebraska, North Dakota and South Dakota. A total of 2,017 surveys were completed, with a response rate of 80 percent.

The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation's largest philanthropy devoted exclusively to improving the health and health care of all Americans, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, meaningful and timely change. For more than 35 years, the Foundation has brought experience, commitment and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime. 

The Access Project has served as a resource center for local communities working to improve health and health care access since 1998 and is a research affiliate of the Schneider Institute for Health Policy at Brandeis University. The Access Project works to strengthen community action, promote social change and improve health, especially for those who are most vulnerable. By supporting local initiatives and community leaders, The Access Project is dedicated to strengthening the voice of underserved communities in the public and private policy discussions that directly affect them. Read more at