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| Minnesota farmers will soon have the chance to trade their grain for help with health insurance. Cargill is announcing a plan to provide health savings accounts for farmers, if they agree to sell their crops to Cargill. (MPR file photo) |
St. Paul, Minn. — Cargill will give farmers up to $5,450 to fund a health savings account, if they agree to sell grain to the Minnesota company. Dean Grossman, vice president for sales and marketing at Cargill AgHorizons, a subsidiary, calls the money a premium. He says it's an incentive for farmers to take their grain to a Cargill elevator.
"We really are in the business of buying grain. And we hope that by offering this type of a tool to farmers, that it will allow us to have that grower deliver more bushels to us," says Grossman. "By showing him and the farm family that we really are trying to help them, we hope we'll build a greater degree of trust with those farmers and their additional production will come to us."
Grossman says the idea is based on an existing Cargill program, where farmers can earn money for building grain bins on their farms if they commit to a Cargill grain contract.
Health savings accounts are part of what's known as consumer-driven health care. The new approach is supposed to reduce insurance costs by giving consumers a greater role in their health decisions. Individuals can deposit money tax-free in their HSA. That money is then used to pay medical bills as part of a high-deductible insurance policy.
Tim Kramer, a farmer in the Hector area, says he's interested in the Cargill idea. He has a traditional health insurance policy for himself, but recently bought a health savings account plan for his wife and four children. He says it was a reaction to ever higher insurance costs.
"It's been rising anywhere from 15 to 20 percent the last three or four years -- even longer than that it's been going up," says Kramer. "My health insurance premiums for my family was up to over $12,000."
Kramer says he saved at least 10 percent on family medical costs with the health savings account.
Cargill's Dean Grossman says the company's plan will give farm families another option.
"A health savings account is clearly not for every farm family. There are unique situations where these high-deductible plans won't be applicable to them," says Grossman. "But for those that are, we hope that farmers will view this as something positive from a large company."
Grossman says the program helps Cargill because it gives the company certainty.
A farmer's commitment to deliver grain is important. There is lots of competition for corn, soybeans and other commodities. Ethanol plants, feedlots and other grain companies are all trying to lock in supplies. Grossman says Cargill has more options if it knows in advance how much grain is coming in on a future date.
Health savings accounts have a little of that same philosophy built in. Consumers know in advance what their annual maximum out-of-pocket medical expenses will be -- the premium cost of the insurance, plus the deductible.
Farmer Tim Kramer likes the approach, but wonders if it will have much impact on the overall medical system -- which he says is broken.
"The cost factor, and the paperwork, and the layers and the lawsuits and all that kind of stuff," says Kramer. "There's a lot of things adding to it, but I think it's definitely a system that's heading for a major crash."
Cargill is calling its plan Harvest Health. Company officials say farmers believe health care issues are one of the main problems in operating their businesses. Cargill hopes the first-of-its-kind program will help address the need.
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