Proposed new budget would slash federal insurance subsidies

Proposed new budget would slash federal insurance subsidies | Insurance Business

Proposed new budget would slash federal insurance subsidies

President Trump’s proposed budget could force farmers to pay more for crop insurance.

The administration is revising the federally subsidized insurance program, with a planned 12% cap on underwriting gains to insurers. By placing a cap, it would lead to savings of $25.7 billion over 10 years.

However, the decision to put a cap on the subsidy program would force farmers to pay a larger share of crop insurance premiums – 52% instead of 38%.

The White House said in its 150-page summary that through the cuts, it would optimize crop insurance and farm subsidies by “eliminating subsidies to higher-income farmers and reducing overly generous crop insurance premium subsidies to farmers and payments made to private-sector insurance companies.”

The federal government also plans to cut farm program benefits from individuals with an adjusted gross income above $500,000 a year. Currently, the program’s cutoff is individuals earning $900,000 AGI.

Successful Farming reported that the budget cuts are similar to Trump’s previous proposals for fiscal 2018 and 2019, which also sought to reduce crop insurance subsidies. Congress turned down both previous proposals.