Larry Harbour is celebrated in Nebraska as a model entrepreneur. But the 33-year-old owner of LB Custom Chrome and Detail in rural Broken Bow, Neb., is an illness or injury away from losing his business.
"If anything were to happen to my wife and I, the business is sunk," Harbour said, standing in the shop he built from scratch. "It's like playing Russian roulette. Every day, we wonder when it's going to happen — if something's going to happen, are we able to afford it?"
Harbour has a son and daughter who are covered by a state health insurance plan for children. He and his wife searched for their own coverage, but found premiums would cost from $12,000 to $20,000 a year, plus a $2,000 deductible. Both are healthy and young, and both work supplemental jobs as school bus drivers, but the jobs don't come with insurance.
He said the insurance he and his wife investigated was basic, to the point where the couple would have to pay more for the insurance than they would for the health care they'd receive.
"It's unaffordable for me, especially being a small business owner, because I don't have a certain amount of employees to be able to get a better rate," Harbour said.
The Harbours are not alone. Half of all jobs in rural places are tied to small businesses, a rate 13 percent higher than in cities and suburbs. And people who work for small businesses are twice as likely to be uninsured, according to Jon Bailey of the Center for Rural Affairs in Lyons, Neb.
"The two biggest determinants of un-insurance in this country are the owner of a small business or employee of a small business," reported Bailey, who co-authored an April 2009 study describing the rates of uninsured and underinsured rural Americans. "And that's more common in rural areas."
Ranchers, Farmers And Individual Insurance
Also common in rural areas are farmers and ranchers, who disproportionately depend on individual insurance plans. Bailey said one-third of farmers and ranchers depend on individual insurance. That's four times the rate for everyone else.
"Data show that 90 percent of farm and ranch families do have insurance," Bailey said. "But the places where they depend on getting their insurance are becoming rarer and rarer, which means they'll have to depend on the individual market, which costs more and provides less coverage."
Some farmers and ranchers have off-farm jobs that provide insurance. But those jobs are harder to come by in this economy. So, many are forced to buy coverage with high premiums or high deductibles or both. That's what Dan and Lorna Wilson found when they searched for insurance.
Insurance With A $5,700 Deductible
The Wilsons are both 57 years old, and they raise organic hogs, corn, soybeans and grain on 640 acres of rich, black earth in Paullina, Iowa. They are depending on their farm to fund their retirement, and they plan to pass it on to their kids. So their health insurance is more about their farm than their health.
"We probably have a net worth that we could weather one major incident," Dan Wilson said. "But it would severely deplete the farming assets. So, we're insuring the farm."
The Wilsons describe themselves as healthy, but the best individual insurance plan they could find costs $492 a month. That's for Dan and Lorna and one of their children. Their deductible is $5,700. They also have a tax-free health savings account, but they've only been able to save about $2,100 so far.
"[That's] not our full deductible," Lorna Wilson said.
She explained that it's hard to make deposits in that account, given the farm and family bills. "They seem to take precedence," she said, noting that the high deductible means the insurance plan has yet to actually pay any health care costs.
"It's just for major medical," she said quietly. "It's just that kind of security there that you have something in case you'd had a huge medical bill."
Why Individual Insurance Costs More
The costs are higher because of the nature of individual insurance. There isn't a large group to spread risk. And the rural population trends older and sicker, according to studies quoted by Bailey. There is also less access to health care in rural places, he added. On top of that, farming and ranching are considered risky professions.
Higher rates have additional costs. Bailey cited surveys showing that farmers and ranchers dip into savings accounts and even take out loans to pay for health care.
"That means that money that is being used for health care can't be reinvested in the business," Bailey said. "So, you end up with lower retirement savings, lower savings in general [and] higher debt loads than you would otherwise because of higher health costs."
There's another cost for both underinsured rural families like the Wilsons and uninsured rural families like the Harbours. Bailey said people with no or costly insurance are less likely to get the preventive care that could help them stay healthy.
"And then you're going to end up later on in life with the more expensive conditions that could have been discovered early on," Bailey added. "So, the kind of insurance people in rural areas have ends up having significant consequences later on in life."
Should The Government Get Involved?
Bailey's group, the Center for Rural Affairs, favors some kind of government-provided insurance alternative. Harbour isn't sure what to make of proposed changes in the health care system. He's no politician, he said. The Wilsons worry that government involvement means excessive government control.
An hour north and east of the Wilson farm, farmer Linus Solberg climbs down from his cultivator and climbs into a car to get out of the wind and to lay out his concern about health care reform. Solberg has hosted presidential candidates and inquiring reporters, so he's ready with a firm point of view.
"Health insurance is killing rural America," Solberg said. "Because people just can't keep up and pay their bills. And that shouldn't be in America."
Solberg, 69, is covered by Medicare, but he worries about his 60 million neighbors in rural America.
"We can put people on the moon," he said. "We can go up and fix this Hubble satellite that we have up there. And we can't have health care for all these people. It's ridiculous."
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