As agricultural incomes have declined due to low commodity prices, paying higher health insurance premiums becomes more difficult for farm families. The following is an analysis of 157 operations in the Kansas Farm Management Association that provided health insurance and medical cost information each year from 2008 to 2017.
Any health insurance costs paid by the employer if family members had off-farm employment were not reported, which may underestimate health insurance costs.
Table 1 displays 2017 health insurance costs and medical expenses for the 157 families broken down by family status.
The average for an individual under 65 years old was $8,968 per year in health insurance premiums and $2,273 in health care costs. For singles over 65 years old, health insurance averaged $5,446 a year with an additional $1,889 in medical expenses. It is worthy to examine the range on expenditures by comparing the maximum and minimum values.
Some individuals paid as little as $2,349 a year for health insurance and $211 on medical care expenses, while others paid over $14,000 on health insurance and over $7,000 on medical care expenses.
Couples with the principal farm operator less than 65 years old spent an average of $14,161 on health insurance in 2017 and $4,199 on medical expenses. For couples where the principal operator was 65 years old or more (and likely on Medicare), on average they spent $9,326 per year for health insurance and $3,634 in medical expenses.
Families, defined as having three or more people, paid an average of $14,032 for health insurance in 2017 with an additional $5,221 in average medical expenses. Note, couples less than 65 years old and families are paying similar average health insurance costs, with families paying more in medical expenses in 2017. The range on what families are paying for health insurance is large, with one family paying as little as $2,250 a year while another is paying near $39,000.
To evaluate the trend in health insurance costs over the last 10 years, Figures 1 and 2 show yearly health insurance and medical costs, with net farm income on the secondary axis for comparison.
The same farm/family had to stay within the same category over the complete 10-year period to appear in this analysis.
Couples who turned 65 within the 10 years were excluded, as the trend would be influenced by the year they went on Medicare. Those included in the family category are all less than 65 years old.
Trends for couples less than 65 years old show a higher average health insurance cost, increasing by 93 percent in the last 10 years. The average household went from spending just over $7,000 a year to now $14,000. Medical costs have held somewhat steady, between $3,500 and $5,000 a year on average and not increasing on a yearly basis. Net farm income for these couples was very good from 2008 to 2012 but has since fallen to lower and even negative levels.
Families have seen a similar hike in health insurance costs over the last 10 years, going from an average of just over $7,000 a year to nearly $14,000 in 2017, a 96 percent increase. Medical costs have ranged mostly between $4,000 and $5,500 a year but, unlike couples, have increased on average over this time period. While families have fared slightly better in net farm income, they still saw some very low-income years in 2015 and 2017.
In summary, health insurance costs have been on the rise over the last 10 years. Although quite variable, the average couple or family has nearly doubled their insurance costs in 10 years. Medical expenses have been fairly steady for couples, but families have seen increases by over 40 percent on average.
Across all categories, net farm income has decreased since 2013, which has put even more of a strain on family finances and made paying health insurance costs even more difficult. While data presented here were specific to Kansas producers, a similar trend is no doubt seen nationally. 
PHOTO: Getty Images.
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Robin Reid
- Extension Economist
- Kansas State University
- Email Robin Reid
