As health insurance premiums rise, so does the popularity of cheaper alternatives to covering medical expenses. That’s one reason why healthcare sharing ministries – which can average half the cost of traditional insurance plans – have seen a major membership surge in the past few years.
Healthcare sharing ministries are faith-based non-profit organizations that pool members’ money to share medical expenses. As long as the ministry has been in existence since December 31, 1999, participation exempts members from the Affordable Care Act’s individual mandate to have health insurance.
These organizations generally require members to make a promise to adhere to certain biblical values and to participate regularly in worship or prayers. As a result, some health conditions don’t comport, leaving members to pay out-of-pocket for illnesses stemming from the use of tobacco, alcohol, and drug addiction, for example. They typically don’t pay for mental health services, contraceptives or abortion either.
Since the Affordable Care Act became law, membership for healthcare sharing ministries has grown at a rapid rate.
Ohio-based Liberty HealthShare has seen its membership expand from 100 families to 26,000. “That represents 65,000 lives, and we are adding, on average, approximately 2,000 households every month,” says Dale Bellis, Liberty Health Share’s executive director.
Christian Care Ministry, a healthcare sharing ministry based in Melbourne, Florida. has seen an increase in its membership from nearly 64,000 in September, 2013 just prior to the first enrollment period under the ACA, to almost 212,000 at the end of June.
Estimates are that roughly a half million members nationwide participate in healthcare sharing ministries, which is more than double the number prior to the law taking effect.
Desire for cheaper plans fuels interest
Why the rapid growth?
“We’re all creatures of economics,” says Bellis.
Single people signing onto the Liberty HealthShare ministry pay $199 per month for a plan, couples pay $299 and a family plan costs $449.
Families with membership in the Christian Care Ministry pay on average $350 per month.
Compare that to average monthly premiums through the ACA marketplaces of $286 for individual coverage without subsidies and $727 for family plans. That’s with annual deductibles of more than $4,100 for single coverage and $7,760 for family plans, according to 2015 numbers from online insurance broker, eHealth.
Those numbers may look good, but before ditching your ACA-compliant health insurance policy, here are five things to know about healthcare sharing ministries.
1. They’re not health insurance
Although designed to help consumers cover the cost of medical expenses, healthcare sharing ministries differ in significant ways from health insurance policies that comply with the Affordable Care Act.
“It’s voluntary and cooperative and motivated by compassion and the urge to assist another person in need. That’s really what drives it versus an insurance arrangement where there is a contract of indemnity. That’s the essential difference,” says Bellis.
Each healthcare sharing ministry operates a bit differently, but generally the money collected from members each month is placed into an account. The ministry then facilitates the direct sharing of medical costs among members.
“Each month members can see the names of other members who have benefited from their monthly share amount,” says Michael Gardner, director of marketing and communications for Christian Care Ministry, a healthcare sharing ministry in Melbourne, Florida.
2. State and federal regulations don’t apply
Consumers who face problems with a healthcare sharing ministry, such as when a claim is paid or a service is not covered, aren’t protected by their state’s insurance department.
According to Sabrina Corlette with the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute, about half the states have enacted laws that say members of healthcare sharing ministries don’t get the benefit of state and federal protections. That’s because healthcare sharing ministries are not health insurance companies and do not technically offer health insurance.
That includes the guarantee that certain services or treatments, such as preventive visits and contraceptives, mental healthcare and treatment associated with drug or alcohol use or abuse, are covered.
Most of these organizations do have formal appeals processes in place, but they aren’t enforced by federal or state law.
LibertyShare, for example, alerts members on its website about their rights when grievances over uncovered medical costs occur, and when attempts at resolving the dispute don’t work in the member’s favor.
Regardless of who wins or loses, remember who and what we are. Liberty HealthShare℠ is a voluntary association of like-minded people who come together to assist each other by sharing medical expenses. Such a sharing and caring association does not lend itself well to the mentality of legally enforceable rights.
“It’s buyer beware. If you have health costs not covered there is very little recourse for you. You can’t go to a government agency to complain,” Corlette says.
3. Underwriting is permitted
One common practice the ACA outlawed was the ability of health insurers to turn away people with pre-existing health conditions, or to charge them more for coverage.
Not so with healthcare sharing ministries.
Medical underwriting is allowed and pre-existing health conditions can be excluded from coverage.
4. There are limits to coverage
Unlike health insurance, there are generally limits to the amount of medical expenses healthcare sharing ministries will cover – in some cases, a maximum payout of $125,000 per incident and $1,000,000 per diagnosis.
Although healthcare sharing ministries report most members’ “sharable expenses” are covered, they are clear to say there is no guarantee.
“Neither Medi-Share nor any of its members assume any obligation to pay another member’s medical bills,” Gardner says. Medi-Share’s policy is common among other ministries.
5. No limits on access to doctors, hospitals
Christian Care Ministry is one of a few organizations with a provider network it suggests members tap for care. According to Gardner, staff is better able to negotiate a discounted rate when members see one of the more than 700,000 providers participating with the organization nationwide. However, members are allowed to see any provider they wish.
In most cases, ministries will negotiate prices on members’ behalf. And, it’s a good deal for both the patient and providers, they say.
“Providers are thrilled, and here’s the reason why: It’s now the patient making those choices at the counter about the cost and care and it eliminates this huge administrative bureau that intermediates between physicians and patients. The doctor doesn’t have to call a gate keeper somewhere to ask if they can treat the patient in a certain way. They love it for that reason.”
The fact that they also receive a cash payment – typically Medicare rates with 50 percent to 70 percent added on – also helps to get providers on board.
According to Bellis, 97 percent of all doctors and hospitals take the reimbursement they negotiate.
Look before a leap of faith
Corlette of Georgetown University’s Health Policy Institute says anyone considering a healthcare sharing ministry in place of an ACA-compliant health insurance plan just needs to enter with their eyes wide open.
“What I would say about health sharing ministries is they are a leap of faith, both literally and figuratively.”