Nonprofit ag groups are one step away from offering health benefits without S.D. regulation

Capitol News Bureau

PIERRE, S.D. (KELO) — The South Dakota House could have the final legislative say in the coming days whether nonprofit agriculture groups get to offer health benefits to members without state regulators looking directly over their shoulders.

The House Agriculture and Natural Resources Committee recommended Tuesday that SB87 pass. South Dakota Farm Bureau Federation is pushing for the legislation that’s based on a model Farm Bureau pioneered in Tennessee.

The committee’s 11-1 vote sends the bill to the full House for debate as early as Wednesday afternoon. The Senate approved it 19-15 last week.

South Dakota Farm Bureau President Scott Vanderwal said the coverage would be offered primarily through existing Farm Bureau insurance outlets. An actuarial study estimated that about 1,500 members would join the plan in the first year, with 750 to 1,000 each year after.

The reinsurer for Farm Bureau would have to report its financial condition to the state Division of Insurance. The application for coverage and the member’s contract would have to prominently say the health benefit plan isn’t insurance

Representative Rocky Blare, an independent insurance agent, is the bill’s lead sponsor in the House. The Republican lawmaker from Ideal told committee members the Farm Bureau proposal could help fill a gap for some of the estimated 80,000 South Dakotans who don’t have health insurance but whose incomes are too high for Medicaid.

“It’s not for everybody. It’s not perfect. They do have health underwriting. But folks, why would we say no to giving people another option? And that’s why I took this up,” Blare said.

Among the opponents was Randy Moses from the South Dakota Independent Insurance Agents. He said state insurance regulators normally can look at the finances of most providers but wouldn’t have that power if the nonprofit ag groups are exempted.

“Whatever we do — I agree that you’d like to do something — but don’t do harm,” Moses said.

Representative Roger Chase, a Huron Republican who’s a co-sponsor, asked Vanderwal whether Farm Bureau with its other insurance offerings had ever been unable to pay a claim. The answer was no.

“We’re very careful about making sure we have reinsurance,” Vanderwal replied. “Our property-casualty companies and the life companies make sure they’re properly reinsured.”

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