Alabama House approves bill letting ALFA offer health plan outside insurance regulations
The Alabama House of Representatives debates a bill to allow the Alabama Farmers Federation to set up a health care plan for its members that would not be regulated as insurance.(Mike Cason/[email protected])
The Alabama House of Representatives on Thursday passed a bill to allow the Alabama Farmers Federation to offer healthcare coverage to its members through a plan that would not be classified or regulated as insurance.
ALFA, a powerful lobbying force in the State House, says the plan would be an affordable alternative for farmers and other federation members who otherwise struggle to pay for health coverage.
The bill is sponsored by Rep. David Faulkner, R-Mountain Brook, and has 39 co-sponsors. Faulkner said the plan would be similar to farm bureau health plans in 10 states, including Tennessee.
After more than two and a half hours of debate, the bill passed by a vote of 98-1. It moves to the Senate.
The bill has drawn opposition, including from organizations who say the ALFA plan will have gaps in coverage that are not allowed in plans regulated by the Alabama Department of Insurance and the federal Affordable Care Act.
Opponents include the state’s dominant health insurance company, Blue Cross and Blue Shield (BCBS) of Alabama, as well as the American Diabetes Association, American Lung Association and the American Heart Association.
They note that the ALFA plan could reject customers with pre-existing medical conditions.
Health insurers that fall under the Affordable Care Act cannot reject people or charge them more because of pre-existing conditions.
Faulkner’s bill does have protection for members who become ill after they join the plan. It says members cannot be cancelled or have their premiums increased as a result of a medical event.
The bill says the plan must provide ambulatory patient services, hospitalization, emergency services, lab services, mental health care, substance use treatment, and prescription drugs.
The bill would apply a 1.3% tax on premiums.
On the House floor today, Faulkner said the plan could save federation members 30% to 60% on the cost of their health insurance. He said it is not unusual for families to pay $2,000 to $2,500 a month in premiums. He said the number of farms in the state is shrinking and that the bill would help families with one of their largest household costs.
Faulkner said he has worked with BCBS, the Alabama Hospital Association, the Business Council of Alabama, and others to revise the bill and said it would be the most comprehensive farm bureau health plan in the nation.
Most of the co-sponsors of Faulkner’s bill are Republicans. But many Democrats also came to the mic to say they supported it.
Rep. Berry Forte, D-Eufaula, said he grew up on a farm and said many farmers are struggling financially and need help. He said he supported the bill.
“Think about who is putting the food on your table. Who is growing the food,” Forte said.
Faulkner proposed an amendment to remove a section of the bill that said the Department of Insurance would enforce the act.
Rep. Frances Holk-Jones, R-Foley, who has been in the insurance business for more than 40 years, had added that section to the bill during a committee meeting.
Holk-Jones said it was important to keep the Department of Insurance enforcement as a safeguard for members. She compared it to a pre-nuptial agreement. She said lawmakers are responsible for making the plan as strong as possible on behalf of the federation members who will use it.
Faulkner said the plan would be self-regulated by the federation and that members would be protected by their contracts. He said the Department of Insurance does not regulate other self-funded health insurance plans.
No representatives spoke in opposition to the bill. But others expressed concerns about taking the Department of Insurance enforcement out of the bill.
Rep. A.J. McCampbell, D-Livingston, told Faulkner he believed the Department of Insurance enforcement provision should remain in the bill.
Rep. Napoleon Bracy, D-Saraland, questioned what recourse members would have if they had a complaint about the plan.
“Who are they going to call?” Bracy asked.
Faulkner referred to a section of the bill that said the federation would designate an ombudsman and establish a complaint procedure.
It says the Department of Insurance would have the authority to review and comment on any complaint.
Rep. Chris England, D-Tuscaloosa, asked Faulkner why a state law was needed to authorize a plan the federation, a private organization, will offer for its members.
Faulkner said he did not have a definite answer for that but noted that other states who have similar plans have done them through state plans.
Rep. Juandalynn Givan, D-Birmingham, said the reason the federation is seeking a state law is so that the plan will be exempt from the Affordable Care Act, also known as Obamacare.
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