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Health care sharing ministries (HCSMs) are non-insurance entities in which members “share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs.”
According to recent data published by regulators in Colorado, there are at least 1.7 million people in the U.S. who use HCSMs.
Although HCSMs are not health insurance and do not count as minimum essential coverage under the ACA, the Affordable Care Act (ACA) granted HCSM members an exemption from the requirement that people maintain minimum essential coverage. The ACA’s rules regarding HSCMs are outlined in Section 1501/5000A(d)(2)(B) of the ACA (starting on page 148).
To qualify for the exemption under the ACA, the HCSM had to have been continually sharing members’ health care costs since the end of 1999 or earlier. As of 2021, 107 health care sharing ministries were certified by the federal Department of Health and Human Services and their members were eligible for an exemption from the ACA’s individual mandate penalty
Exemptions from the individual mandate penalty are no longer necessary, because the ACA’s penalty for not having insurance coverage was reduced to $0 as of 2019.
But HCSM enrollment has soared since the ACA took effect, and the plans remain popular, due in large part to monthly membership dues that tend to be lower than full-price health insurance premiums for people who don’t qualify for the ACA’s premium subsidies.
However, it’s important to note that most exchange enrollees do qualify for subsidies (91% in 2023), especially with the subsidy enhancements that are in effect through at least 2025. For people who are subsidy-eligible, a plan obtained through the exchange (Marketplace) could be significantly less expensive than an HCSM membership, while also providing real health insurance coverage.
HCSMs have pros and cons:
Sweeping health reform legislation delivered a long list of provisions focused on health insurance affordability, consumer protections.