California's Farmers and Ranchers Hit Hard by Health Care Costs

Access Project Report Finds That Individual Health Insurance
Market Fails To Provide Adequate Financial Protection to Farm and
Ranch Families
LOS ANGELES--(Business Wire)--
A new report, issued by The Access Project and commissioned by The
California Endowment, that surveyed more than 1,700 California family
farmers and ranchers finds that approximately one in three must
purchase health coverage through the costly individual market because
they have no access to lower-cost group coverage. Furthermore, these
family farmers and ranchers who purchased health coverage through the
individual market spent approximately $4,600 more on premiums and
out-of-pocket health care costs than those farmers and ranchers who
obtained group health coverage from off-ranch or off-farm employment.

The impact of health care costs on non-corporate farm and ranch
operators is significant for a number of reasons. First, family farms
dominate U.S. agriculture and they collectively generate 85 percent of
the value of production. In California, most farms (98%) are family
farms; they produce $32 billion per year in value; and support more
than 1.1 million jobs, approximately 7.4 percent of all employment in
the state. For farmers and ranchers, health care expenses have the
potential to affect not only their families' economic security, but
also the financial viability of their businesses, which may in turn
impact the larger, already challenged California and national economy.

"Families that are forced to rely on California's individual
market pay more for their health coverage policies and deductibles,
and in many cases this is resulting in these family-owned small
businesses carrying on average more than $4,000 in medical and $1,700
in dental debt," said Carol Pryor, lead author of the report and
Senior Policy Analyst for The Access Project. "This suggests that it
is no longer just the uninsured who are suffering from high health
care costs - those with health coverage are also struggling and, in
some cases, delaying needed care."

The report, 2008 Health Insurance Survey of California Farm and
Ranch Operators, cautions that families forced to rely on the
individual market for health coverage may have no alternative but to
pay high premiums for policies that also include significant
deductibles, thus resulting in higher health care costs for those that
experience illness. According to a recent report, people in California
who purchase health coverage through the individual market bear a much
greater share of the cost of care. In 2006, insurance covered 54.6
percent of a typical consumer's medical bills in the individual
market, compared to 83.3 percent in the small group market. Research
also shows that Americans delay care due to medical costs and steep
insurance premiums. Nationally, only approximately 8 percent of the
insured purchase health coverage in the individual market, while
approximately 30 percent of California's family farmers and ranchers
have no alternative but to purchase health coverage in the individual
market.

"The financial burden on farm and ranch operators that this study
reveals represents a significant drain on the ability of these rural
businesses to grow and thrive," added Bill Lottero, co-author of the
report.

Robert Ramming, 52, a Yolo County retail fresh-market organic
farmer said, "The roughly $8,000 per year we spend on minor medical
bills, health insurance premiums, and modest dental & vision care is a
major chunk of our family's income and the largest item in our budget.
If we can make it to age 65 still in good health, and if Medicare is
still functioning and solvent, then maybe my wife and I can start
saving for retirement."

Bette Hinton M.D. M.P.H Director-Health Officer County of Yolo
Health Department said "At a time when non-farm employers are cutting
back on their provision of health care insurance to employees, this
lack of available/affordable insurance is bad news for Yolo County
which has a largely agricultural economy."

Yolo County Supervisor Helen M. Thomson said "Yolo County's long
standing commitment to agriculture includes ensuring there is an
adequate health care and delivery system for farmers, their families
and their farm workers. This study demonstrates the tough fiscal
reality of obtaining health insurance and the costs and impacts of
illness on California farms. This is an escalating crisis we all now
face."

Other significant findings of the report include:

-- More than half (55%) of respondents obtained health coverage
through off-farm or off-ranch employment.

-- Among those who said their principal occupation was farming or
ranching, nearly half (48%) bought insurance through the
individual market.

-- Even though most respondents had health insurance, about one
in four (26%) had to dip into their financial resources to pay
for health care. Of these seven in 10 had to use family
savings, almost three in 10 increased their credit card debt,
15 percent borrowed against their home or business, and more
than one in 10 (11%) withdrew money from a retirement account.

-- Thirteen percent of respondents said they had debt resulting
from medical or dental bills. Among these respondents the
average amount of medical debt was $4,276 and average amount
of dental debt was $1,760.

-- Sixteen percent of respondents said they or a household member
delayed seeking needed health care services, with the majority
(65%) saying the primary reason for delaying care was because
they could not afford the cost.

-- On average, farm and ranch families reported spending $8,817
on health insurance premiums and medical out-of-pocket
expenses; this translates into spending of over $700 a month.

-- More than half (54%) of respondents reported that they had
household incomes between $20,000 and $99,000. For many of
these families, average overall health care expenditures
constituted between nine and 44 percent of their income.

"Clearly, our current system of health coverage is not supporting
the health care needs of all Californians. The individual health
coverage market is fraught with high costs and uncertainty for
consumers," said Robert K. Ross, M.D., president and CEO of The
California Endowment. "And now we're seeing a number of these family
businesses struggling to meet their health care costs because the
policies available to them are not adequately covering their health
care expenses, leaving them to bear the burden."

Click here to access the report. Interviews with family farmers
surveyed for the report can be facilitated by contacting Jeff Okey at
(213) 928-8622 or via email at jokey@calendow.org.

NOTE TO EDITORS: The Access Project in partnership with the Yolo
County Public Health Department will be holding a discussion about the
growing burden of health care costs on California's family farmers and
ranchers at 10 a.m. on July 31 in the Walker Room of the Herbert Bauer
Alcohol, Drug, and Mental Health and Health Department located at 137
N. Cottonwood Street, Woodland, CA 95695. RSVP by Monday, July 28 to
Norma Springsteen at norma.springsteen@yolocounty.org.

About The Access Project:

The Access Project has served as a resource center for local
communities working to improve health and healthcare access since 1998
and is a program of Third Sector New England. The Access Project is a
research affiliate of the Schneider Institute for Health Policy at
Brandeis University. The Schneider Institute is part of Brandeis'
Heller School for Social Policy and Management. The work of The Access
Project embodies the Heller School motto, "Knowledge Advancing Social
Justice."

About The California Endowment:

The California Endowment, a private, statewide health foundation,
was established in 1996 to expand access to affordable, quality health
care for underserved individuals and communities, and to promote
fundamental improvements in the health status of all Californians.
Headquartered in downtown Los Angeles, The Endowment has regional
offices in San Francisco, Sacramento, Fresno and San Diego, with
program staff working throughout the state. The Endowment makes grants
to organizations and institutions that directly benefit the health and
well-being of the people of California. To date, The Endowment has
awarded approximately 9,800 grants across California totaling nearly
$1.8 billion. For more information, visit The Endowment's Web site at
www.calendow.org.

The California Endowment
Jeff Okey, 213-928-8622
jokey@calendow.org

Copyright Business Wire 2008