Health Insurance Coverage

In 2011, ERS surveyed farm operator households about their health insurance coverage. Data on this page reflect the health insurance coverage of farm operators in 2011 and do not incorporate potential coverage changes from the implementation of the Affordable Care Act of 2010.

Because medical attention is expensive and often essential for maintaining one's health, the incidence of health insurance among populations is an important indicator of their well-being. As with U.S. households in general, a major risk facing farm households is illness or injury to household members, with associated medical expenses potentially draining household resources. Health insurance provides individuals or groups with at least partial reimbursement for covered medical expenses in return for a fee. It also indicates how much health-related financial risk the household bears.

In 2011 (prior to implementation of the Affordable Care Act of 2010), 15.7 percent of the U.S. population had no form of health insurance. However, only 9.3 percent of farm household members lacked health insurance, indicating that they faced lower health-related financial risks than the general population.

Most Americans receive health insurance through their employers. Although farm operators are largely self-employed, the majority of farm households have an operator or spouse employed off the farm (see the Farm Household Income and Characteristics data product table on health expenditure and insurance coverage information of principal farm operator households, by off-farm work, 2011). As with the general population, the most common source of health insurance for members of farm households is employment-based. In fact, farmers are as likely as the general U.S. population to receive their health insurance through an outside employer. Farmers were more likely than the general population in 2011 to purchase their health insurance directly from an insurance company, and less likely to receive health insurance from a government-sponsored program, such as Medicare or Medicaid.

In 2011, more than half of farm household members had health insurance coverage from an employment-based plan. Time demands on the farm prevent many farmers or ranchers from accessing employer-sponsored insurance through an off-farm job (see the Farm Household Income and Characteristics data product table on Health expenditure and insurance coverage information of principal farm operator households, by commodity specialization, 2011). This is especially true of dairy farmers; only 36 percent of dairy household members were covered by employee plans in 2011 (versus 57 percent of all farm household members). This largely explains why over a third of dairy household members were uninsured in 2011, compared to 9.3 percent for all farm household members.

Whether a household possesses health insurance and the source of that health insurance are major determinants of household expenses for health care. On average, the most expensive type of health insurance is direct purchase. Farm households with direct-purchase insurance had the highest premiums of all farm households, more than $6,000 per household. They also incurred the highest out-of-pocket medical expenses, spending more than $2,400 in addition to health insurance premiums in 2011.