Vilsack focuses on health care benefits for farmers
By Jeff Hansel
Date Modified: 04/15/2010 8:49 AM
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Soon after President Obama signed the new Patient Protection and Affordable Care Act, the White House began a full-court press to highlight what proponents see as its benefits.
For U.S. Agriculture Secretary Tom Vilsack, that means touting the law's expected insurance effect on rural America and farmers.
"In rural communities, if you're self-employed, you're in a much smaller pool … with very little choice, with very little competition for your business, and so therefore insurance companies were in a position to increase prices and increase costs of insurance for the self-employed and for farm families," said Vilsack, the former governor of Iowa. Now, he said, the pool of insured people will be much larger, bringing savings to farm families.
Also, he said, most farm families who have struggled to afford insurance will be eligible for tax credits.
The situation in farm communities has been exacerbated by a large number of uninsured people in rural America in general, Vilsack said. Those people often get treated at emergency rooms, where the care is more expensive, and the costs shifted to people with insurance.
A wider swath of farmers will be able to get health insurance, including federally funded preventive care from family doctors instead of the ER, driving costs down, Vilsack said.
The number of farms in the United States peaked at 6.8 million in 1935, the U.S. Environmental Protection Agency says. In 2009, there were 2 million farms, the EPA reports.
The Department of Labor estimates that in 2008 there were 1.8 million workers employed full time in agricultural production.
Vilsack said farming is one of the most dangerous occupations in the country, so the elimination of lifetime benefits limits will have a big effect.
Impact on taxes
National Farmers Union President Roger Johnson called the law's passage "a huge victory for the nation, especially farmers, ranchers and rural Americans." But not all farmers think that way.
Larry Larson operates a Mower County grain elevator in Sargeant and raises hogs and crops.
"I just wonder what it's going to cost me in taxes to pay for this thing," he said. His biggest concern is the effect on his personal and business taxes.
"Folks will say that there are tax increases — which is accurate for families earning over $200,000 — but that doesn't cover too many of our farm families. Farm families aren't making that kind of money," Vilsack said.
He said tax credits to make health insurance more affordable will be claimed on farmers' tax returns each year.
Off-farm jobs
Many farm families stay solvent by having one spouse who works off the farm simply to get employer-based health insurance. Will farm families save enough under the new law to allow those people to return to the farm and free up jobs for people who are unemployed?
That's unlikely, Vilsack said, because only 11 percent of farm income comes directly from agricultural production.
"We're going to continue to need employment opportunities in rural America. There's no question about that," he said. "We have a higher level of poverty and a higher level of unemployment in rural America than the rest of the country. So there's going to continue to be a premium on jobs and job creation and access to jobs, and given the low margins for many farm families, off-farm income can often be the difference between keeping the farm and losing the farm."