Alabama House committee debates bill allowing Alfa to offer health care plans
Rep. David Faulkner, R-Mountain Brook, speaks on the floor of the Alabama House of Representatives on April 25, 2024 at the Alabama Statehouse in Montgomery, Alabama. An intense debate took place in a House committee Wednesday over legislation sponsored by Faulkner that would allow the Alabama Farmers Federation to offer health care plans to members. (Brian Lyman/Alabama Reflector)
An Alabama legislative committee held a public hearing Wednesday on a bill that would allow the state's dominant agricultural organization to offer health benefit plans to its members.
HB 477, sponsored by Rep. David Faulkner, R-Mountain Brook, was the subject of intense debate lasting nearly an hour. Supporters said farmers needed more health care options, while opponents warned about the proposed legislation's lack of consumer protections.
'We have the opportunity here in Alabama to help the farmers and small business owners who are the heart of communities… by allowing the federation to develop an Alfa health plan for its members,' Faulkner said to the committee, claiming the plan could 'save a family in your in your district up to $18,000 a year.'
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The bill would create the means for a nonprofit agricultural organization — fitting the description of the Alabama Farmers Federation (Alfa) — to provide health plan options not subject to state insurance regulations.
The bill states the qualifying organization is 'not a health insurer and is not engaging in the business of health insurance.'
Proponents said the measure could be a lifeline for farmers and small business owners struggling with conventional health insurance costs.
Monica Carroll, whose husband is a sixth-generation farmer from Dale County, said health care costs forced her to take an off-farm job despite wanting to manage the family poultry operation.
Her newly-married son, she said, wanted to join the farm. But she asked, 'How are they going to be able to afford health care?… Who will be the ones to carry on our legacy if they can't afford a health care plan and still be able to farm?'
While the bill mandates coverage for ambulatory patient services, hospitalization, emergency services, and laboratory services, opponents pointed out the absence of requirements for other ACA essential health benefits. They raised concerns about potential loopholes and the lack of patient protections established under the Affordable Care Act (ACA), such as excluding individuals with pre-existing conditions.
'We believe this bill threatens those protections by allowing the sale of health plans that are not required to cover essential health benefits… and can discriminate against individuals with pre-existing conditions, including cancer,' said Jane Adams, government relations director for the American Cancer Society Cancer Action Network (ACS CAN) in Alabama.
Adams cited alleged negative experiences from Tennessee's similar plan, which provides health plans that are not traditional health insurance to Tennessee Farm Bureau members, including denials based on conditions like a history of melanoma or a negative breast biopsy. She also warned the bill could 'destabilize the insurance market' by siphoning off healthy individuals from traditional health insurance.
Ben Sanders, executive director of government affairs for Tennessee Farm Bureau Insurance, said Tennessee's Farm Bureau health plan, which has been operating since 1947, accepts 85-90% of applicants, has a 98% retention rate, covers conditions like cancer after enrollment, includes mental health and prescriptions, and does not impose annual or lifetime limits. He also claimed that data showed their plan did not negatively affect Tennessee's ACA marketplace. While acknowledging Tennessee's plan had 250 complaints in 2024, he said this was out of 2.6 million claims processed.
Faulkner said the bill is not meant to reform health care insurance but to help a small portion of the population with health care costs and that Alabama's bill was 'more restrictive' than Tennessee's or any other state.
Deanna Deschaun, a resident of Shelby County who lives with multiple sclerosis and works with the National Multiple Sclerosis Society, said that she feared plans could deny enrollment based on individuals' pre-existing conditions or impose annual and lifetime limits on benefits.
She also pointed out that if someone develops a condition like MS and loses coverage under the Alfa plan, it 'does not trigger a special enrollment period' for ACA marketplace coverage, which is typical for people who lose health insurance, potentially leaving them uninsured when they most need health care.
'Offering Alabama farmers health plans that may not provide coverage for pre-existing conditions does not protect them from high health care costs. In fact, enrolling in these unregulated plans — and lack of transparency around them — makes it more likely that farmers will experience financial harm,' Deschaun said.
Faulkner said the bill resulted from extensive negotiations and included numerous safeguards, pointing to provisions like requiring a complaint system for customers and rules for out-of-network emergency care payments. The plans would also be subject to a 1.3% premium tax payable to the state's General Fund. He called it 'by far the most comprehensive Farm Bureau plan in the country.'
'This is not a plan for everyone. This doesn't even save the nation or the state in health care, but it is an option. It is an option for some, and it could mean economic survival for small business owners and farmers,' Faulkner said.
But the plan is not for everyone. After the committee meeting, Faulkner said that for people with pre-existing conditions have other options, like getting health insurance through the marketplace.
'The ACA Health Marketplace is there. It's there right now. What we're trying to do is provide an option for farmers [and] small business owners so they can lower their health care costs,' Faulkner said.
But Rep. Frances Holk-Jones, citing 48 years as an insurance professional, questioned the lack of explicit language requiring agents to be licensed by the state. She also said that the bill does not explicitly say which benefits are covered, saying that 'planning' to include those in the contracts gives her 'great concern.'
'I want the word 'planning on it' out of the discussion. I want the words, 'this is what we're doing,'' she said.
Ted Hosp, vice president of governmental relations for Blue Cross Blue Shield of Alabama, the largest private insurer in the state, said he expected the bill to pass, but asked for specific amendments.
Hosp said that 'at the very least' there should be a provision that states once a person has such a health plan, the plan can't be canceled, and premiums can't be raised if the person gets sick. He also asked the committee to consider mandated coverage of mental health and prescription drugs, and explicit enforcement authority for the Department of Insurance.
'Alfa has told you that they plan to do all of the things that we are asking to be put in this bill at this point. Based on that and based on the commonsense nature of the changes that we are asking for, it's surprising to me that Alfa has not simply accepted those changes and moved on,' Hosp said.
House Health Committee Chair Rep. Paul Lee, R-Dothan, also seemed concerned about codifying consumer protections. He asked Sanders and Faulkner if they were intended to cover benefits like mental health and why it was not explicitly listed in the bill along with other covered benefits.
Faulkner pushed back, saying that most states don't have covered benefits listed on the legislation, and that is determined through contracts.
'Of the 10 programs out there that have passed in states, only two listed benefits in their bill … This is the four benefits that were listed in two out of the 10 plans. So, we have done that and listed those here,' Faulkner said.
Lee asked if Faulkner meant that Alfa would cover the additional benefits not listed in the legislation, which Faulkner confirmed Alfa would.
'All I'm asking is for it to be put in writing,' Lee said.
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