We are self-employed, which means we have to supply our own health insurance. We’d be far better off financially if I took a teaching job (I have a Master’s in science education and could be certified for grades 6-12), which would provide a base salary and health coverage along with a reliable income, but then we wouldn’t be able to run this farm as the business we want it to be, and wouldn’t be able to spend the time together that we value so much. We and those like us take a real risk in our personal health and financial viability in attempting to make a living independently. Many farm-based folks keep some form of off-farm job partly to acquire or afford insurance, even if that caps their ability to build their farm business (I know of good farmers who had to stop farming because they had children and couldn’t afford the insurance and health costs without a “real” job). Many full-time farmers, especially young and start-up farmers, go without insurance entirely because it’s too expensive (like many I know around here).
We aren’t willing to take that risk. A significant health incident (car accident, major disease, mild but disabling injury) would wipe out our ability to run this farm, and we at least want some protection from the financial impacts of such an event. Keep in mind that it’s far easier for a health situation to ruin our business than an average salaried job; even a broken finger that kept me from doing weeding, harvest, and washing/packing for a month would be a disaster for us even if it was financially negligible from the health expense point of view.
However, health insurance costs are awful for us. We have a 5-figure deductible in an attempt to keep costs down, meaning in effect we pay all our medical expenses out of pocket, even responsible preventative care like annual checkups. Dental and eye care is entirely on our dime, no coverage of any kind. The insurance is only for ruinous, life-changing incidents like major injuries or diseases, because that’s all we can remotely afford, even with the massive deductible, and even with our extremely healthy and low-risk lifestyle (like only driving twice a week instead of most commuters’ 5-6 days a week, and rarely during dangerous commuting hours). We even joined a smaller Missouri-based insurer that has reduced coverage for expenses incurred out-of-state, in an effort to keep costs down since we rarely travel. Unlike most couples, we’ve chosen not to have children (partly for financial reasons), which again keeps our costs and risks down but isn’t a viable choice for many people who truly want children, as our culture strongly encourages. And yet costs are inexorably rising for no change in benefits.
At the start of 2010, we paid $204/month to cover both of us (Joanna is far more expensive than I am solely because she’s female). In August 2010 that went up to $254. We just received a letter stating that in August 2011 it will rise to $300/month. Nothing in our coverage has changed or improved, and we really have no choice in the matter. We had already gone with the cheapest option we could find, and have no indication the rates won’t keep rising like this.
This is one of the biggest single expenses in our lives, for which we receive no benefits except the potential to not be bankrupted by a disaster, which we effectively would be anyway because a health incident that cost over our 5-figure deductible would wipe out the farm for all practical purposes and force the non-injured person (if that wasn’t both of us) to get some form of job just to support us. In that situation, our business and our lives as we know them would be over.
We loosely supported health care reform because we wanted something to change, to reach a system in which self-reliant entrepreneurs had a fair chance at getting started on their own, without feeling the need to be trapped in a “regular” job just to manage personal risk. Although we have philosophical concerns about the individual mandate, it also seemed the only way for entrepreneurs like us to have a fair chance in the modern world. However, the trend happening in our lives is not what we expected or desired; food prices and farm income will not keep up with this rate of health care inflation.
Keep in mind that to pay $3,600/year in health insurance costs, we have to earn a lot more than $3,600 in produce sales. Our farm business has to earn enough to pay all of the operating expenses of the farm, plus enough to pay for health & auto insurance, and only then can we even think about paying ourselves so that we can pay the expenses that we incur in our personal lives, and only then can we “keep” any of the remaining income. Because we run our farm and household on a low and tight budget, the percent expenditure in our budget for health insurance is especially high. So think of it this way: for every dollar a customer spends at our farm stand (and most spend under $10/week), a significant percentage is going straight to the coffers of the health insurance company which doesn’t give a hoot about our personal healthy and low-risk lifestyle.
It also doesn’t matter that the core activity of our business (selling fresh, healthy produce) has a direct benefit on our personal health and that of all our customers. Our existence, and our choices, make the country a healthier (and thus cheaper for the insurer) place. Yet none of that factors at all into the cost of our, or anyone else’s, health insurance. We could run a tobacco factory and eat fast food three times a day and still be treated the same by the health care industry.
The final frustration here relates to my earlier point that many other farmers either don’t have insurance or get it through an off-farm job. It’s not my place to fault either decision, but it does affect the economics of prices and marketing. Someone who isn’t trying to pay health insurance, or who has it provided through an off-farm job, isn’t trying to earn that through their farm business, which means they can (and do) charge lower prices and/or make more personal profit (that extra $300/month would be wonderful for us). The former is in effect gaming the system, since if they do get injured the system will still handle them (the classic uninsured problem), while the latter is more responsible but really isn’t improving the sustainable economics of small farms and local foods. We’re being responsible citizens by insisting on having health insurance even at ruinous cost, but we earn far less personal income and get no benefit in the marketplace for that decision, just sniffs that our prices are too high. I can’t exactly put up a sign saying “buy from us because we’re responsible citizens”.
Related to this issue is auto insurance. Consider two periods in our lives. First, the several years when Joanna was working at a 30-mile roundtrip commute year-round, and I was on the farm and driving 25 miles roundtrip to market on Saturdays during growing season. So one of us was on the road six out of seven days for most of the year. Second, the period when Joanna came home and we went full-time, so that now we drive to town twice a week during the growing season (Tuesday restaurant deliveries and Saturday market) and once or twice a month during the winter, mostly during off-traffic hours. One guess as to which period has higher rates. When we went full-time and listed both of our vehicles as business use, as that was now their primary function, our auto insurance rates doubled, even though we’re driving far less and during less dangerous times. And we’re both very cautious, careful drivers with perfect life records. I’m the guy Missouri drivers pile up behind on VV or E because I’m actually driving the speed limit, and the guy who gets cut off on US-63 because I actually leave safe following distance in front of me. But we’re now paying double our old rates for the sole privilege of being self-employed, in a system that couldn’t care less about our actual driving skill or patterns.
I have a lot of sympathy for the unemployed and underemployed, especially in this recession, but when we look at this budget the cynic in us wonders if we’d be better off not working long days 7 days a week to pay off mostly useless health & auto insurance, and just collecting unemployment or working normal part-time odd jobs while growing only our own food and being uninsured. It would probably be smarter financially than running a responsible, sustainable, honest business whose income is capped by people’s expectations of what subsidized, migrant-picked produce is supposed to cost.
In effect, the current system penalizes good, responsible civic behavior. What are we supposed to do?